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http://www.archive.org/details/economichistoryoOObogarich 


THE  ECONOMIC  HISTORY 

OF 

THE  UNITED  STATES 


BY 

ERNEST  LUDLOW  BOGART,  Ph.D. 

PRINCETON    UNIVERSITY 


LONGMANS,    GREEN,    AND    CO. 

91    AND   93    FIFTH   AVENLE,  NEW   YORK 

LONDON,    BOMBAY,    AND    CALCUTTA 

1908 


Copyright,  1907, 
By  Longmans,  Green,  and  Co. 


First  Edition,  November,  1907. 
Reprinted,  with  Revision,  March,  1908. 


The  Plimpton  Press  Norwood  Mass.  U.^.A . 


S.  M.  B. 


i^  f\  e\  ^*  rr  o 


PREFACE 

The  purpose  of  this  book  is  not  to  rehearse  the  events 
common  to  political  and  constitutional  histories  of  the  United 
States,  but  rather  to  emphasize  the  points  neglected  by  them. 
The  keynote  of  all  American  history,  from  whatever  standpoint 
it  may  be  written,  is  found  in  the  efforts  of  a  virile  and  ener- 
getic people  to  appropriate  and  develop  the  wonderful  natural 
resources  of  a  new  continent  and  there  to  realize  their  ideals 
of  liberty  and  government.  The  economic  history  of  the 
United  States  is  largely  the  story  of  the  achievements  of  a 
people  working  under  free  competition,  untrammeled  by 
custom,  tradition,  or  political  limitations,  and  whose  changing 
conditions  of  environment  constantly  compelled  new  adapta- 
tions and  promoted  ingenuity  and  energy  of  character.  The 
history  of  this  economic  struggle  is  not  one  whit  less  interesting 
or  dramatic  than  the  political  history  of  the  same  period,  while 
it  is  absolutely  essential  to  a  thorough  understanding  of  the 
latter. 

When  this  book  was  put  into  manuscript,  this  story  had 
nowhere  been  told  in  connected  form,  and  it  was  to  supply 
this  lack  that  it  was  written.  Beginning  with  the  explorations 
and  settlements  that  led  to  the  colonization  of  the  continent, 
there  is  traced  the  growth  of  industry,  agriculture,  commerce, 
transportation,  population,  and  labor,  from  the  simple,  isolated 
agricultural  communities  of  the  colonies  to  the  complex  in- 
dustrial and  commercial  society  of  to-day.  In  each  period 
the  important  events  are  emphasized,  and  the  attempt  is  made 
to  bring  out  clearly  their  causal  relations.  While  the  chrono- 
logical  order  of  presentation   has   been  followed   in  general, 


viii  PREFACE 

related  chapters  are  so  grouped  that  the  thread  of  the  narra- 
tive is  broken  as  little  as  possible.  Owing  to  the  inaccessi- 
bility of  many  of  the  data  upon  which  the  reasoning  and 
conclusions  are  based,  as  w^ell  as  the  lack  of  any  other  single 
volume  covering  just  the  same  ground,  it  has  been  thought 
desirable  to  state  clearly  though  concisely  the  chief  facts 
involved.  Where  the  statistical  form  of  presentation  was 
possible,  they  have  been  condensed  into  a  statistical  table. 
The  endeavor  has  been  made,  however,  to  keep  the  facts 
subordinate  and  to  interrupt  as  little  as  possible  the  con- 
tinuity of  the  narrative. 

The  book  has  been  written  for  high-school  as  well  as  college 
students.  An  effort  has  been  made  to  adapt  the  subject 
matter  to  students  of  both  grades  by  the  addition  of  a  number 
of  Suggestive  Topics  and  Questions,  with  Selected  References 
at  the  end  of  each  chapter,  which  can  be  used  for  further  re- 
search at  the  discretion  of  the  teacher.  The  chapter  bibliog- 
raphies contain  a  few  only  of  the  most  accessible  references; 
a  full  bibliography  is  appended  at  the  end  of  the  book. 

My  acknowledgments  and  thanks  are  due  many  friends  for 
aid  and  encouragement  during  the  preparation  of  this  volume, 
but  especially  to  Professors  G.  M.  Fisk,  of  the  University  of 
Illinois,  and  E.  D.  Jones,  of  the  University  of  Michigan,  for 
reading  the  manuscript  and  making  many  valuable  suggestions; 
to  m}^  colleagues,  W.  M.  Adriance,  E.  S.  Corwin,  Edgar  Dawson, 
C.  H.  Mcllwain,  Royal  Meeker,  W.  S.  Myers,  H.  R.  Shipman, 
C.  W.  Spencer,  H.  R.  Spencer,  and  W.  L.  Whittlesey,  for 
reading  portions  of  the  proof  and  correcting  errors  of  fact 
and  expression.  But  most  of  all  my  sincere  thanks  are  due 
my  wiie,  whose  assistance  and  sympathy  have  greatly  light- 
ened the  task  of  writing  this  book  in  every  stage  of  its  prep- 
aration. 

Ernest  Ludlow  Bogart. 

Princeton  University 

October  20,  1907. 


CONTENTS 


chapter  page 

Introduction 

I.     The  Land  and  its  Resources 1 

'^  II.     Exploration  and  Colonization    ^ 17 

PART   I 
Colonial  Devitlopment 

English  Colonial  Theory  and  Policy  / ^ 34       '_. 

Colonial  Industries :  49 

Agriculture  and  Land  Tenure 62  ^^ 

The  Systems  of  Labor 78  -^'' 

Population  and  Communication 88 

<^ 

PART   II 

Struggle  for  Commercial  and  Economic 
Independence  (1763-1808) 

VIII.     American  Commerce  and  Commercial  Policy    ....        97 

IX.     Cotton  and  Slavery.     Agriculture 115 

X.     Introdtiction  of  Manufactures 130 

PART   III 

The  Industrial  Revolution  and  the  Westward 
Movement  (1808-1860) 

XL  The  Domestication  of  the  Factory  System  (1808-1840)   .  142    . 

XII.  The  Growth  of  the  Factory  System  (1840-1860)         .      .  157 

XIII.  The  Westward  Movement       .    • 170 

XIV.  Transportation  and  Internal  Improvements  (1808-1840)  186 

XV.  Shipping  and  Inland  Commerce  (1840-1860)    ....  203 

XVI.  Currency  and  Banking 217 


X  CONTENTS 

CHAPTER  PAGE 

XVII.  Public  Lands  and  Agriculture  (1808-1840)       ....     228 

XVIII.  The  Application  of  Machinery  to  Agriculture  (1840-1860)     238 

XIX.     Slavery  and  the  South 251 


PART   IV 

Economic  Integration  and  Industrial 

Organization  (1860-1906)  \ 

XX.     The  Production  and  Export  of  Food  and  Raw  Aifaterials 

(1860-1880) '    .  266 

XXI.     Agriculture  as  a  Business  (1880-1906)         286 

XXII.     Transportation  and  Communication  (1860-1880)         .      .  305 

XXIII.  Railroads  and  Internal  Commerce  (1880-1906)      ...  317 

XXIV.  Currency  and  Banking  (1860-1906) 338 

XXV.     Manufacturing  for  Home  Use  (1860-1880)        ....  356 

XXVI.     Manufacturing  on  a  Large  Scale  (1880-1906)   ....  373 

XXVII.     Industrial  Combinations         400 

XXVIII.     The  Emergence  of  the  Labor  Problem         419 

XXIX.     Labor  and  Labor  Organizations  (1880-1906)    ....  434 

XXX.     Commercial  Expansion.     Conclusions 454 

Bibhography 471 


ILLUSTRATIONS 


PAGE 

Colonial  Ship  Building 51 

Spinning  Wheel 56 

The  Hand  Loom 58 

A  Colonial  Wheel  Plow  of  1748 66 

Hand  Corn  Sheller         68 

Tobacco  Field 69 

W^ooden  Harrow  and  Fork 73 

Stage  Coach 91 

Massachusetts    Colonial    Currency    (courtesy   of    A.     McF.    Davis, 

Cambridg(%  Mass.) 92 

British  Tax  Stamp         98 

William  Pitt 102 

Fitch's  Second  Boat 110 

Fitch's  Third  Boat        Ill 

Fulton's  Clermont 112 

Eli  Whitney  (from  a  painting  by  Chappel)          116 

Whitney's  Cotton  gin          117 

Deck  Plan  of  a  Slave  Ship  (from  an  old  print) 121 

Farming  Tools,  1790 124 

Hargreave's  Spinning  Jenny 131 

Arkwright's  First  Spinning  Frame 132 

Crompton's  Spinning  Mule 133 

First  Mill  in  Ohio 134 

Alexander  Hamilton 137 

Samuel  Slater  (from  a  print) 144 

Spinning  Room  in  Slater's  Mill,  1830  (from  White  "s  Memoirs  of  Slater)  148 

Migrating  from  Connecticut  to  Ohio         171 

Conestoga  Wagon 173 

Mississippi  River  Steamers  at  Cincinnati,  1830 176 

Mississippi  River  Flatboat 177 

Western  Ark 182 

Canal  Passenger  Packet  Boat  (courtesy  of  the  Pennsylvania  Railroad 

Company) 191 


xii  ILLUSTRATIONS 

PAGE 

Passenger  Packet  and  Freight  Boats,  Erie  Canal 192 

Sail  Car  (courtesy  of  the  Pennsylvania  Railroad  Company)  .      .      .  197 

Horse  Car  (courtesy  as  above) 198 

John  Stevens's  Locomotive  (courtesy  as  above) 199 

American  Clipper  Ship 205 

The  Steamship  Asia  (courtesy  of  the  Cunard  Steamship  Company)  207 
Traveling  in   1837   (advertisement)    (courtesy  of   the  Pennsylvaina 

Railroad  Company) 211 

Railroad  Station  at  Lancaster,  Pa.  (from  Hale's  Memories  of  One 

Hundred  Years  Ago,  by  permission) 212 

Development  of  the  Railway  (courtesy  of  the   Pennsylvania   Rail- 
road Company) 214 

Continental  Papc^r  Money         218 

Sutter's  Mill  and  Race  (from  a  print) 223 

Horse  Rake,  1818 229 

Cradle  Scythe,  1818 230 

Plow  and  Neck  Yoke,  1832 231 

First  McCormick  Reaper,  1831  (courtesy  of  the  International  Har- 
vester Company  of  America) 233 

Mowing  by  Scythe  (courtesy  as  above) 235 

Improvement  of  the  Wagon.     I 240 

Improvement  of  the  Wagon.     II 240 

Improvement  of  the  Wagon.     Ill 241 

Improvement  of  the  Wagon.     IV 241 

Improvement  of  the  Hog.     I         243 

Improvement  of  the  Hog.     II 243 

Improvement  of  the  Hog.     Ill 244 

Cotton  Picking  (copyright  by  Underwood  &  Underwood)      .      .      .  252 

Sorting  Cotton 255 

Cotton  Levee  at  New  Orleans 257 

Runaway  Slave  (from  a  picture  in  a  newspaper) 261 

Harvesting  with   Cradles  (courtesy  of  the   International   Harvester 

Company  of  America) 269 

Great  Northern  Elevator  and  Shipping,  Buffalo,  X.  Y 271 

A  Modern  Cotton  gin 274 


1 1 


Cream  Separator  (courtesy  of  the  De  Laval  Separator  Company,  N.Y.) 

Power  Churn  and  Butter  Mixer 278 

Pulp  Mill  (courtesy  of  the  International  Paper  Company)      .      .      .  280 

Open  Pit  Iron  Mine 282 

A  Combined  Harvester  and  Thrasher  in  the  State  of  Washington   .  287 
Forty    Bindei-s   at   Work   in    Iowa    (courtesy  of    the   International 

Harvester  Company  of  America) 290 


ILL  Ui^  TEA  TIONS  xiii 

PAGE 

A  Modern  Corn  Harvester  (courtesy  of  the  International  Harvester 

Company  of  America) 291 

Corn  Shocker  (courtesy  of  the  International  Harvester  Company  of 

America) 292 

Corn  Husker  and  Shredder  (courtesy  of  the  International  Harvester 

Company  of  America) 295 

Irrigation  Ditches 300 

Driving  the  Last  Spike 308 

Train  of  1870  (courtesy  of  the  Pennsylvania  Railroad  Company)    .  310 

The  Locks  at  Sault  Ste.  Marie,  Mich 312 

Engine  and  Train,  1831   and   1906    (courtesy  of  the   Pennsylvania 

Railroad  Company) 320 

American  Steam  Shovel  at  Panama 330 

The  Kaiserin  Augusta  Victoria  (courtesy  of  the  Hamburg-American 

Steamship  Company) 333 

rjold  Dredge  (courtesy  of  Professor  Robert  Peele,  Columbia  Uni- 
versity)          350 

Hydraulic  Gold  Mining  near  Telluride,  Colorado 352 

l^essemer  Converter  at  Edgar  Thomson  Works,  Pittsburg  .  .  .  361 
The  McKay  Sewing  Machine  (courtesy  of  the  United  Shoe  Machinery 

Company) 303 

Lasting  Machine  (courtesy  as  above) 364 

United  States  Patent  Office,  Washington 368 

Heavy  Worsted  Loom  (courtesy  of  Crompton  and  Knowles  Loom 

Works,  Worcester,  Mass) 386 

Spooling   Room,    Pacific   Mills,    Lawrence,    Mass    (courtesy   of   the 

Pacific  Mills) 387 

Blast  Furnace,  Youngstown,  Ohio 389 

Rolling  Mills  at  Edgar  Thomson  Works,  Pittsl:)urg 391 

Minei-s  at  work         393 

Shaft  Iron,  IVIine 395 

Oil  Wells 406 

One  of  the  Largest  Paper  Machines  in  the  World  (courtesy  of  the 

International  Paper  Company)          409 

Armour  and  Company's  Plant  at  Chicago  (courtesy  of  Armour  and 

Company,  Chicago) 413 

Breaker  Boys  at  a  Coal  Mine  in  Kingston,  Pa 441 

Children  at  Work  in  South  Carolina  Cotton  Mills    ......  450 

An  American  Reaper  in  Russia 456 


I 


MAPS 

NO.  PAGE 

1.  Regional  Distribution  of  Products  in  the  United  States     Frontispiece 

2.  Xavigiiblo  Water-ways 4 

3.  The  Fall  Line  of  Rivers         5 

4.  Physical  Map  of  the  United  States 10 

5.  Trade  Routes  to  the  East 18 

G.     Claims  of  Nations,  1750  (colored) facing       23 

7.  Claims  of  Nations,  1763-75         25 

8.  Claims  of  Nations,  1783         30 

9.  Portages  Connecting  Natural  Water-ways 90 

10.  Conflicting  Land  Claims  of  States,  1783  (colored)     .      .  facing  127 

11.  Erie  Canal 190 

12.  Railroads,    Canals,    Stage    Lines   and    the   Cumberland 
Road,  1850  (colored) facing  212 

Local  Bank  Statistics 220 

Territorial  Growth  of  the  I'nited  States,  1783-1853  ...  248 
Cotton  Kingdom  and  its  Dependencies.      (From  Olmsted's  The 

Cotton  Kingdom)  (colored) facing  257 

Railways  in  the  United  States,  1860 306 

Railways  in  the  United  States,  1870-1880  (colored)  .  .  facing  312 
Railway     Consolidation,     1906.     Vanderbilt     and     Harriman 

Groups  (colored) facing  325 

Railway  Consolidation,  1906.     Pennsylvania,  Gould,  and  Hill 

Groups  (colored) facing  326 

Iron  Ore  Shipping  Routes 332 

Depreciation  of  the  Greenback         341 

Fluctuations  in  the  Value  of  Silver 347 

Center  of  Manufactures  and  the  Center  of  Population     .      .      .  382 

Wages  and  Prices 429 

Foreign  Immigration  to  the  United  States 436 

Chart  Showing  the  Commercial  Expansion  of  the  Four  Principal 

Nations,  1871-1906 458 

XV 


THE    LAND    AND    ITS    RESOllRG^S ,  ,     ,3 

miles  or  about  one  fourteenth  of  the  entireda^d.^iirf^^ceof  the 
earth.  Continental  United  States,  ex'clusi>;^e  of'Ala^lr-i'or  ixi^t 
island  possessions,  contains  2,972,584  square  miles  of  land 
surface,  or  somewhat  less  than  Europe,  which  has  an  area  of 
some  3,700,000  square  miles. 

4.  The  coast  line.  —  The  advantages  to  a  nation  of  having 
a  seacoast  well  provided  with  numerous  bays  and  harbors 
are  obvious.  Not  less  important  for  the  internal  commerce 
of  a  country  is  a  system  of  long  and  navigable  rivers.  In 
both  these  respects  the  United  States  is  wonderfully  well 
provided.  The  Mississippi  River  with  its  tributaries  drains 
over  1,000,000  square  miles  of  territory  in  the  very  heart  of 
the  most  fertile  region  of  the  country.  Cities  more  than  1000 
miles  inland  have  direct  water  communication  with  the  sea- 
board, and  coal  is  transported  more  than  1000  miles  from 
Pittsburg  to  the  upper  reaches  of  the  Missouri  River.  Alto- 
gether, it  is  estimated  that  there  are  18,000  miles  of  navigable 
rivers  in  the  United  States,  while  the  shore  line  of  the  Great 
Lakes  extend  for  at  least  1000  miles  more.  The  coast  line  on 
both  oceans,  including  indentations,  is  not  less  than  18,000 
miles  in  length,  which  gives  about  one  mile  of  shore  line  for 
each  165  square  miles  of  surface.  Europe,  which  is  the  most 
favored  in  this  respect  of  any  division  of  the  Old  World,  is  es- 
timated to  have  19,500  miles  of  seacoast,  of  which  3000  are 
within  the  Arctic  circle,  leaving  only  16,500  available  for  com- 
merce, or  one  mile  of  coast  for  each  224  square  miles  of  surface. 

5.  Water  power.  —  In  this  connection  should  be  mentioned 
the  amount  of  water  power  available  for  industrial  use  in  the 
United  States.  In  colonial  days  this  was  of  chief  importance 
and  determined  the  location  of  many  a  town.  With  the  in- 
vention of  the  steam  engine  and  the  use  of  coal  as  a  motive 
power,  industry  became  less  dependent  upon  water  power, 
but  with  the  rise  of  electrical  appliances  and  the  harnessing  of 
our  streams  and  falls  for  their  service,  we  are  beginning  to  value 
this  item  in  our  national  wealth  more  highly.  ''It  is  prob- 
able,"  says   Shaler,    "  that,   measured   in   horse   power  or  by 


ECONOMIC   HISTORY    OF    THE    UNITED   STATES 


THE   LAND    AND    ITS    RESOURCES 


manufactured  products,  the  energy  derived  from  the  streams 
of  this  country  is  already  more  valuable  than  those  of  all  other 
lands  put  together."  The 
most  valuable  water 
powers  are  found  east  of 
the  Mississippi  River  and 
west  of  the  Cordilleran 
chain.  Even  in  the  case 
of  the  best  water  power 
there  are,  however,  in  spite 
of  its  cheapness,  certain 
drawbacks :  it  must  be  ap- 
plied where  it  is  found, 
except  as  it  is  used  to 
develop  electric  power, 
and  is  subject  often  to 
serious  seasonal  limita- 
tions. The  energy  which 
is  obtained  from  coal, 
on  the  other  hand,  may 
be  developed  where  it  is 
needed,  at  any  time  and 
to  any  amount.     On  this 


The  Fall  Line  of  Rivers 
Towns  sprang  up  at  the  fall  line  of  most 
of  the  rivers,  owing  to  the  presence  there 
of  water  power  and  to  the  interruption  to 
navigation  at  that  point. 


account  the  presence  of  coal  has  proved  a  more  important 
factor  than  water  power  in  determining  the  concentration  of 
the  population  and  the  regional  distribution  of  industries. 

6.  Coal.  —  Fortunately  for  the  human  race,  coal  is  widely 
distributed  throughout  the  world,  although  Europe  and  the 
United  States  to-day  supply  practically  all  the  coal  now  mined. 
Professor  Tarr  estimates  the  actual  coal-producing  area  in 
the  United  States  at  not  over  50,000  square  miles,  of  which 
only  a  small  part  is  being  worked.  According  to  the  United 
States  Geological  Survey  there  are  335,000  square  miles  of 
coal-bearing  strata  in  this  country,  but  much  of  it  is  too 
thin  or  impure  to  be  available  for  industrial  use.  It  serves, 
however,  in  many  localities  as  domestic  fuel,  and  few  places  in 


6  ECONOMIC   HISTORY    OF    THE    UNITED    STATES 

the  United  States  are  far  removed  from  burnable  coal.  By 
far  the  greatest  part  of  our  available  supply  is  bituminous, 
the  area  which  is  underlaid  with  anthracite  being  not  more 
than  484  square  miles.  Not  merely  in  the  extent  of  the 
area  underlaid  with  coal  are  we  favorably  situated,  but  our 
superiority  over  Europe  and  the  rest  of  the  world  is  made 
more  e^ddent  by  a  comparison  of  the  thickness  of  the  seams, 
the  depth,  the  dip,  and  the  cost  of  working.  In  all  these  re- 
spects we  have  an  advantage. 

7.  Iron.  —  Next  in  importance  to  the  fuel  supplies  of  the 
United  States  rank  its  stores  of  iron  ore.  These  exist  in  large 
quantity  and  are  widely  disseminated,  though  in  the  main  they 
occupy  three  great  fields.  On  the  east  the  Appalachian  field, 
which  stretches  from  Newfoundland  to  central  Alabama,  con- 
tains large  deposits  of  rather  impure  ore.  The  deposits  of  the 
Lake  Superior  region  are  extensive  and  of  remarkable  purity, 
and  are  so  situated  that  economical  methods  of  mining  and 
transportation  to  market  are  possible.  In  the  Cordilleran 
district  there  are  practically  inexhaustible  supplies  of  iron,  but 
owing  to  the  absence  of  coal  suitable  for  smelting,  the  ore  re- 
mains undeveloped  except  for  local  purposes.  Colorado  forms 
the  only  important  exception.  The  conditions  of  iron  pro- 
duction in  the  United  States  are  set  forth  as  follows  by  Professor 
Tarr:  "  An  iron  ore,  in  the  present  state  of  the  iron  industry, 
must  occur  in  a  very  favorable  position  as  regards  market; 
it  must  be  of  good  quality  and  considerable  quantity, 
and  favorably  situated  for  extraction  and  smelting.  Iron 
is  now  so  cheap  that,  where  mining  operations  are  difficult, 
as,  for  instance,  where  the  mine  is  deep,  the  vein  narrow, 
gangue  abundant,  or  transporation  difficult,  it  cannot  be 
mined." 

/Iron  and  coal,  more  than  any  other  mineral  substances, 
form  the  material  basis  of  our  industrial  prosperity,  and  in  the 
possession  of  large  supplies  of  both,  the  United  States  is  greatly 
blessed. 

8.  Other  metals,  —  Next  after  iron,   copper  ranks  as  the 


THE   LAND   AND    ITS    RESOURCES  7 

most  necessary  in  the  industrial  arts.  In  primitive  civiliza- 
tions, as  among  the  Indians,  it  was  especially  valuable  because 
easily  worked.  With  the  discovery  of  processes  for  smelting 
iron,  copper  lost  its  earlier  importance,  which  it  has  regained 
only  in  the  last  decade  or  so  as  the  result  of  a  rapid  extension  in 
the  use  of  electricity.  The  United  States  is  the  greatest  copper- 
producing  country  in  the  world,  turning  out  over  half  of  the 
total  amount.  Most  of  it  is  mined  in  the  States  of  Montana, 
Michigan,  and  Arizona. 

Lead  and  zinc  are  usually  found  associated ;  in  the  circum- 
stances of  their  distribution  they  resemble  copper,  with  which 
they  are  frequently  found  united.  In  the  production  of  both 
these,  the  United  States  is  surpassed  by  F.urope.  A  com- 
paratively small  amount  of  aluminum  is  produced  here,  but 
this,  with  other  metals,  is  of  minor  importance. 

Of  far  greater  value,  though  of  subordinate  importance  in 
the  industrial  arts,  are  the  so-called  precious  metals  —  gold 
and  silver.  In  the  production  of  both  of  these,  the  United 
States  to-day  ranks  first,  though  her  position  as  a  producer  of 
silver  is  more  firmly  established.  These  metals  occur  plenti- 
fully throughout  the  country,  but  all  the  important  deposits 
are  found  in  the  Rocky  Mountain  region.  Since  the  discovery 
of  gold  in  California,  the  Appalachian  deposits  have  remained 
practically  unworked.  Colorado  heads  the  list  of  States  as  a 
producer  of  both  gold  and  silver. 

9.  Other  minerals.  —  In  addition  to  the  metals  some  of  the 
non-metallic  mineral  products  of  the  United  States  should  be 
mentioned.  The  country  is  well  supplied  with  building  stone, 
though,  owing  to  their  weight  and  size,  the  production  of  all 
but  the  best  varieties  remains  local.  Phosphates,  of  which 
large  deposits  have  recently  been  developed  in  South  Carolina 
and  other  southern  States,  and  other  mineral  fertilizers  are  of 
growing  value  as  the  need  of  enriching  the  exhausted  soil 
becomes  greater.  Salt  is  obtained  mainly  from  the  deposits 
of  rock  salt  in  Pennsylvania,  New  York,  and  several  other 
States,  though  considerable  is  obtained  by  the  evaporation  of 


8  ECONOMIC   HISTORY    OF    THE    UNITED   STATES 

water  in  Utah  and  Nevada.  Other  minerals,  of  less  impor- 
tance, as  cements,  clays,  grindstones,  graphite,  etc.,  can  only  be 
mentioned. 

10.  Animal  life.  —  The  principal  animals,  as  also  the  vege- 
table products,  which  do  not  constitute  the  original  resources 
of  the  country  but  are  rather  the  results  of  man's  efforts,  will 
be  treated  elsewhere  under  the  appropriate  headings.  In  this 
connection  will  be  noted  simply  the  value  of  the  native  fauna. 
The  animal  life  indigenous  to  North  America  had  enormous  eco- 
nomic significance  to  the  aborigines,  less  to  the  colonists,  and 
has  scarcely  any  to  us  to-day.  Of  all  the  fauna  of  native 
origin  the  turkey  is  the  only  one  which  has  been  domesticated. 
To  the  Indian  the  wild  game,  such  as  deer,  buffalo,  moun- 
tain sheep,  etc.,  were  of  greatest  economic  importance,  since 
they  furnished  him  with  food,  and  the  materials  for  clothing, 
shelter,  weapons,  and  other  necessaries.  To  the  early  colonist 
and  fur-trader  the  fur-bearing  animals,  such  as  the  beaver, 
squirrel,  mink,  sable,  badger,  fox,  and  weasel,  were  more  val- 
uable. The  presence  of  quantities  of  game  in  the  neighboring! 
forests  was  moreover  of  considerable  importance  to  the  colonist, 
as  he  was  thus  able  to  supply  his  table  and  vary  his  diet  with 
a  minimum  expenditure  of  effort.  Quantities  of  edible  wild 
fowl  too  passed  overhead  every  year,  as  pigeons,  turkeys, 
prairie  chickens,  ducks,  geese,  quail,  etc.  To-day  these  have 
been  practically  exterminated,  or  a  small  remnant  only  sur- 
vives under  the  protection  of  strict  game  laws. 

Of  far  greater  importance  from  an  economic  standpoint  are  ' 
the  fishes,  the  supply  of  which  has  not  been  so  easily  reduced. 
The  salmon  of  the  North  Pacific  coast  stands  easily  first  among 
these;  followed  by  the  cod,  mackerel,  herring,  and  shad  of  the 
Atlantic  coast;  and  white  fish,  lake  herring,  and  sturgeon  of 
the  Great  Lakes.  Oysters,  gathered  by  the  Indians  in  immense 
numbers,  still  form  the  basis  of  a  lucrative  industry  on  the 
middle  Atlantic  coast.  The  exploitation  of  all  these  native 
resources  of  the  United  States  has  proceeded  recklessly  and 
ruthlessly,  and  only  recently  has  some  effort  been  made  to 


THE    LAXD    AXD    ITS    RESOURCES  9 

conserve   and   maintain   for   future   generations   by   scientific 
methods  our  native  animal  and  vegetable  wealth. 

11.  The  forest.  —  The  forests  of  the  United  States  cover 
an  area  of  about  700  million  acres,  or  more  than  35  per  cent,  of 
the  area  of  the  count r3\  Of  these  by  far  the  greater  part  is 
found  in  the  section  east  of  the  Mississippi,  which  originally 
was  a  vast  continuous  forest.  In  the  northern  States  there 
stretched  the  great  white  pine  forest,  from  which  most  of  our 
lumber  has  come,  from  colonial  days  to  the  present:  scmLl^  of 
this  in  a  broad  belt  lies  the  southern  pine  forest,  whose  most 
important  tree  is  the  yellow  pine.  In  the  Mississippi  valley 
are  found  the  hardwood  forests  of  oaks,  hickories,  ashes,  gums, 
etc.  West  of  the  Mississippi  .stretches  a  forest  less,  often  tree- 
less, area  of  millions  of  acres;  with  the  Rock^^  Mountains  begins 
again  the  coniferous  interior  forest,  and  still  further  west  the 
PaoifiiL-C'oast  forest.  In  this  interior  section  the  cliief  lack  has 
always  been  water  rather  than  wood. 

"  Our  civilization  is  built  on  wood.  From  the  cradle  to  the 
coffin,  in  some  shape  or  other,  it  surrounds  us  as  a  convenience 
or  a  necessity."  The  early  settlers  drew  upon  the  forests  for 
food,  fuel,  and  shelter.  And  yet  the  dense  woods  of  the  Atlantic 
coast,  which  had  to  be  cleared  before  crops  could  be  raised, 
and  which  often  concealed  hostile  Indians  and  animals,  came 
to  be  regarded  rather  as  an  obstacle  than  a  blessing.  Vast 
areas  were  ruthlessly  burned  down  and  the  land  denuded  of  its 
forest  growth.  This  la\ish  waste  of  one  of  our  most  important 
natural  resources  has  persisted  almost  down  to  the  present 
time,  and  we  are  only  now  beginning  to  realize  the  necessity 
and  possibility  of  preserving  and  increasing  this  source  of 
wealth. 

12.  The  fertility  of  the  soil.  —  Among  the  valuable  resources 
of  a  country  should  be  included  a  good  climate  and  a  fertile 
soil:  together,  these  are  of  great  importance  in  promoting  the 
welfare,  prosperity,  and  material  comfort  of  the  people.  Con- 
sidered as  a  whole,  the  fertility  of  the  soil  of  the  United  States 
is  remarkably  great,  but  this  can  best  be  seen  by  describing 


10  ECONOMIC    HTSTORY    OF    THE    UNITED   STATES 


THE   LAND    AND    ITS    RESOURCES  11 

separately  the  six  physical  regions  into  which  the  country  is 
usually  divided.     These  are  the  following: 

(1)  The  Coastal  Plain  Region,  although  not  very  fertile, 
was  the  portion  of  the  country  first  settled.  Not  more  than 
12.000  square  miles  is  untillable,  it  is  well  forested,  and  suited 
to  the  growth  of  wheat,  corn,  tobacco,  and  cotton.  Furnished 
with  unrivaled  water  power  at  the  falls  of  the  rivers  and 
splendid  harbors  at  their  mouths,  this  region  has  been  the 
seat  of  many  large  and  important  cities. 

(2)  The  Appalachian  Region  contains  the  greater  part  of 
the  States  of  New  York,  Pennsylvania,  West  Virginia,  the 
Carolinas,  Georgia,  Tennessee,  Kentucky,  and  Ohio.  "  Taken 
altogether,  this  mountain  system  is  perhaps  the  finest  region 
for  the  uses  of  man  that  the  world  affords;  its  great  length,  of 
more  than  1500  miles  from  north  to  south,  gives  it  a  range  of 
climate  such  as  would  be  had  in  Europe  by  a  mountain-chain 
extending  from  Copenhagen  to  Rome.  The  total  area  of  this 
Appalachian  district,  mountains  as  well  as  table-lands,  is  about 
300,000  square  miles.  This  is  an  area  equal  to  near  thrice  the 
surface  of  Great   Britain."  ^ 

(3)  The  Middle  Prairie  and  Lake  Region  has  an  exceedingly 
fertile  soil  and  an  abundant  rainfall;  in  the  South,  indeed, 
the  moisture  is  excessive  except  for  such  plants  as  sugar, 
cotton,  and  rjce,  which  form  the  staple  crops  of  the  lower 
Mississippi.  The  soil  of  the  prairies  is  exceedingly  fertile  and 
is  capable  of  supporting  an  immense  population.  Owing 
probably  to  glacial  action  the  land  is  very  level  and  there  are 
no  great  forests  in  this  section  of  the  country.  The  natural 
advantages  of  this  section  for  water  transportation  and  for  the 
cheap  construction  of  railways  are  remarkable.  The  Mississippi 
River  and  its  tributaries,  the  Ohio  and  the  Missouri,  are  navi- 
gable for  over  10,000  miles,  while  for  fully  half  that  distance 
they  are  accessible  by  vessels  of  considerable  size.  On  the 
north  the  Great  Lakes  offer  unrivaled  facilities  for  water 
transportation,  and  with  the  ''  Soo,"  Welland.  and  Erie  canals 

^Shaler  in  Winsor:  Xar.  and  Crit.  Hist.,  IV,  p.  iv. 


12         ECONOMIC   HISTORY    OF    THE    UNITED    STATES 

afford  an  outlet  to  the  ocean  for  the  agricultural  and  mineral 
products  of  the  Northwest. 

(4)  The  Great  Plains  or  Steppe  Region  are  a  treeless  ex- 
panse of  grass  lands.  As  a  result  of  deficient  rainfall,  agricul- 
ture is  impossible  except  where  irrigation  is  used  or  along  the 
river  bottoms.  Consequently,  the  region  is  given  over  mainly 
to  grazing  and  stock  raising. 

(5)  The  Cordilleran  or  Plateau  Region  is,  next  after  the 
Himalaya  system,  the  most  extensive  region  of  great  altitude 
in  the  world.  Probably  nineteen  twentieths  of  its  lands  are 
irretrievably  barren,  while  their  great  height  reduces  much  of 
the  land  to  the  east  to  a  condition  of  sterility.  They  contain, 
however,  immense  mineral  wealth. 

(6)  The  Pacific  Slope  Region  is  of  great  fertility,  well 
watered,  and  with  an  exceedingly  equable  and  attractive 
climate.  It  is  the  garden  spot  of  the  United  States.  Un- 
fortunately, the  coast  of  this  region  is  broken  by  few  harbors 
or  navigable  rivers,  and  its  commercial  development  is  there- 
fore unlikely  to  equal  that  of  the  less  fertile  Atlantic  coast 
region;  it  is  also  separated  by  a  wide  ocean  from  industrially 
undeveloped  countries. 

13.  Temperature.  —  Next  in  importance  to  the  fertility  of 
the  soil  may  be  ranked  the  distribution  of  temperature  and 
rainfall.  Temperature  has  both  a  direct  influence  upon  man 
and  an  indirect  influence  through  its  effect  upon  the  plant  and 
animal  life  at  his  disposal.  A  cold  climate  seems  best  adapted 
to  call  forth  those  virtues  which  are  helpful  to  economic  pro- 
gress. Those  portions  of  Europe  which  have  sent  forth  the 
most  energetic  peoples  and  have  developed  the  highest  civi- 
lization are  situated  between  the  lines  of  forty  and  seventy 
degrees  average  annual  temperature.  The  temperature  of  the 
United  States  is  substantially  the  same  as  that  of  western 
Europe,  the  mean  annual  temperature  being  53°  F.,  though  the 
extremes  of  heat  and  cold  are  much  greater  in  this  country 
than  in  Europe. 

A    certain    minimum    of    heat,   too,   is    necessary  for   the 


THE   LAND   AND    ITS   RESOURCES  13 

development  of  plant  life.  The  temperature  required  to  start 
the  dormant  activities  of  plant  life  is  usually  given  as  43.8°  F., 
and  the  northward  movement  of  the  isotherm  of  this  temper- 
ature marks  the  advent  of  spring.  For  the  full  development 
of  vegetable  life,  however,  a  much  greater  amount  of  heat  is 
required,  which  is  secured  during  the  summer  months. 

14.  Rainfall.  —  Of  not  less  importance  than  the  temper- 
ature is  the  amount  and  distribution  of  moisture.  An  annual 
rainfall  of  at  least  20  inches  is  essential  to  agriculture,  districts 
with  less  than  that  being  suited  only  to  grazing,  while  a  rain- 
fall much  exceeding  50  inches  produces  a  rank  growth  harmful 
to  most  of  the  plants  grown  in  the  United  States.  The  average 
annual  rainfall  of  the  United  States  is  29.6  inches;  east  of  the 
one  hundredth  meridian,  however,  the  average  is  much  higher 
and  gradually  increases  toward  the  east  and  southeast.  West 
of  the  one  hundredth  meridian  the  rainfall  decreases  as  one 
proceeds  to  the  west  and  southwest,  the  temperature  rising  as 
the  rainfall  declines.  About  three  quarters  of  the  population 
are  found  in  the  regions  enjoying  an  annual  rainfall  of  between 
30  and  50  inches,  the  conditions  there  being  most  propitious 
for  sustaining  a  dense  population. 

15.  Climate  and  economic  development.  —  Several  advan- 
tages result  from  the  possession  by  the  United  States  of  this 
varied  yet  well-balanced  climate.  Owing  to  the  wide  varia- 
tions in  the  climate  and  character  of  the  land  there  exists  an 
immeiLiQ-iiaikt^of  plant  life.  The  danger  of  a  general  failure 
of  our  staple  agricultural  crops  is  slight,  for  a  loss  in  one  part 
of  the  country  is  njjjw^pprtflin  to  be  made  good  in  another. 
A  certain  stability  is  thus  given  to  agricultural  products  and 
prices.  Another  advantage  exists  in  the  variety  .of  crops,  w-hich 
such  a  wide  range  of  climate  ensures.  Not  merely  does  the 
United  States  lead  all  countries  in  the  production  of  dairy 
products,  corn  and  wheat,  of  coal,  iron,  copper,  lead,  gold,  and 
silver,  but  the  greater  part  of  the  liuxibaK^  iiieats^  tutmxo, 
cotton,  and  petroleum  which  enter  into  the  world's  trade  come 
from  its  forests  and   fields.      This  diversity  of    climate  and 


14        ECONOMIC   HISTORY    OF    THE    UNITED   STATES 


resources  has  meant  great  diversit}'  of  occupations  with  atten- 
dant differences  of  interests,  habits  of  Hving,  and  modes  of 
thought.  While  this  fact  has  had  a  certain  influence  in  divid- 
ing the  people  into  sections  with  opposing  interests,  on  the 
whole  it  has  made  for  broadness  of  view  and  catholicity  of 
interests. 

In  its  direct  effect  upon  the  race  which  has  grown  up  in  the 
New  World,  the  environment  seems  to  have  made  for  a  stronger 
and  hardier  people  than  any  of  those  of  the  Old  World.  The 
best  available  statistics  on  this  point  are  probably  those  gath- 
ered by  Dr.  B.  A.  Gould,  during  the  Civil  War,  which  are  based 
upon  measurements  of  over  1,000,000  soldiers.  The  main 
results  are  briefly  summarized  in  the  following  table:  ^ 

Physical  Measurements  of  White  Soldiers  (Aver.  Age  21  Years) 


Circumference  of 
Chest  (Inches) 


New  England    

Middle  States  (N.  Y.,  N.  J.,  Pa.) 

Ohio  and  Indiana 

Coast  Slave  states      

England     

France,  Belgium,  and  Switzerland 
Germany 


Height 

Weight 

(in.) 

(lbs.) 

67.9 

139.4 

67.5 

140.8 

68.4 

140.8 

68.2 

140.9 

66.6 

137.6 

66.5 

137.8 

66.7 

140.3 

From  this  it  will  be  seen  that  the  P^uropean  stock  has  im- 
proved during  the  long  residence  in  America,  and  that  the 
American  of  to-day  is  better  developed  physically  than  his 
Old  World  cousin.  "  When  one  considers  all  these  things," 
says  Channing,  —  ''the  climate  and  rainfall  of  the  United 
States,  its  physical  configuration,  its  adaptability  to  the  service 

*  U.  S.  Sanitary  Commission  Memoirs,  vol.  II,  pp.  104,  277,  403. 


THE   LAND   AND    ITS    RESOURCES  15 

of  civilized  man,  its  fertile  soils  and  magnificent  water  powers. 
its  inpxhanstible  mineral  resoui:££a^  and  the  effect  of  this  en- 
vironment on  the  physical  body,  —  one  must  admit  that  the 
European  race  has  gained  by  its  transfer  from  its  ancient 
home  to  the  soil  of  the  United  States."  And  one  must  also 
appreciate,  it  may  be  added,  the  effect  on  their  development 
of  the  remarkable  environment  and  wonderful  resources  in 
the  midst  of  which  the  American  people  have  worked  out  and 
are  working  out  their  economic  and  social  destiny. 

SUGGESTIVE  TOPICS  AND  QUESTIONS.    CHAPTER  I 

1.  What  relation,  if  any,  exists  between  the  shape  and  distribution 
of  the  land  masses  of  the  earth  and  man's  development?  [Shaler,  The 
United  States,  I,  chap.  1;  Winsor,  Narrative  and  Critical  History  of 
America,  IV,  1.] 

2.  Does  the  configuration  or  situation  of  a  locality  determine  the 
character  or  occupations  of  its  inhabitants?  [C.  C.  Adams,  Commercial 
Geography,  chaps.  2,  3.] 

3.  Why  has  the  Cordilleran  system  been  called  "the  curse  of  the 
continent"?  Is  it?  [Shaler,  in  Winsor,  Narrative  and  Critical  History 
of  America,  IV,  5.] 

4.  Is  there  any  connection  between  the  presence  of  forests  and  the 
amount  of  rainfall?  [Gannett,  in  Bulletin  of  American  Geographical 
Society,  July,  1901.] 

5.  What  effect  does  the  Gulf  Stream  have  upon  the  climate  of  the 
United  States?  [Patton,  Natural  Resources  of  the  United  States,  72; 
H.  Gannett,  "Errors  in  Geography,"  in  Bulletin  of  American  Geographical 
Society,  July,  1901.] 

6.  Does  it  seem  prol^able  that  the  prairies  of  the  United  States  were 
due  to  the  annual  burning  of  the  grass  by  the  Indians,  in  order  to  enlarge 
the  pasture  of  the  buffalo?     [Shaler,  Nature  and  Man  in  America,  p.  184.] 

7.  "The  world  could  dispense  with  the  precious  metals  more  easily 
than  it  could  with  coal  and  iron";  is  this  true?  [Patton,  Natural  Re- 
sources of  the  United  States,  40.] 

8.  Compare  the  known  coal  supply  of  the  United  States  with  that  of 
other  industrial  nations;  what  conclusions  may  be  drawn  with  respect  to 
the  question  of  industrial  supremacy?  [Monthly  Summary  of  Commerce 
and  Finance,  Treasury  Department,  September,  1902.] 

9.  If  the  Pacific  coast  were  well  provided  with  harbors  and  navigable 
rivers,  is  it  likely  that  it  would  become  commercially  and  industrially  as 
important  as  the  Atlantic  seaboard? 


16        ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

10.   As  man  progresses,  does  he  become  more  or  less  dependent  upon 
his  physical  environment? 

SELECTED  REFERENCES.    CHAPTER  I 

*Channing:   Students'  History  of  the  United  States,  Intro. 
*Farrand:    Basis  of  American  History,  chaps.  1-4. 

* Mineral  Resources  of  the  United  States. 

**Shaler:   The  United  States,  I,  chaps.  1-3,  7-9. 
**Shaler:   Nature  and  Man  in  America. 

**Whitney:   The  United  States;  also  in  Encyclopaedia  Britannica,  ninth 
edition. 

Gannett:   The  Building  of  a  Nation. 

Patton:   Natural  Resources  of  the  United  States. 

Reclus:   The  Earth  and  its  Inhabitants,  vol.  Ill,  The  United  States. 

Russell,  I.  C:   North  America,  chaps.  1-6. 

Shaler,  in  Winsor's  America,  IV,  i-xxx. 

Tarr:   Economic  Geology  of  the  United  States,  part  1,  chap.  3= 


Note. — The  double  asterisk  denotes  the  best  references  on  the  subject; 
the  single  asterisk  good  references;  books  without  asterisks  are  good,  but 
for  one  reason  or  another  are  not  so  useful  for  the  subject  of  the  chapter. 


CHAPTER   II 
EXPLORATION    AND    COLONIZATION 

16.  The  Renaissance.  —  The  fifteenth  centiny  marks  the 
height  of  the  Renaissance,  the  awakening  of  men's  minds  from 
the  skmiber  of  the  Middle  Ages.  Compact  monarchies  were 
growing  up  on  the  ruins  of  feudahsm,  and  were  gaining  strength 
from  new  alhances  with  industrial  towns.  Manufactures 
became  increasingly  important;  navigation  was  stimulated  by 
the  discovery  of  the  mariner's  compass.  The  Jnvputiou  of 
g]inpnAV(ler..was  the  final  Wiav  to  the  military  powpj-  of  the 
fglKlnl  lords,  while  the  invention  of  printing  spread  the  new 
learning  among  the  common  people.  Peaceful  activities 
])ecame  increasingly  prevalent,  whilst  the  ascetic  ideal  of  the 
Middle  Ages  was  shattered,  thus  opening  the  way  for  com- 
mercial expansion  by  raising  the  general  standard  of  living. 

17.  Geographical  discoveries.  —  A  new  spirit  of  maritime 
enterprise  was  awakened,  and  with  phenomenal  suddenness 
the  barriers  of  the  unknown  seas  were  broken  down  almost 
simultaneously  by  the  Spanish,  Portuguese,  Dutch,  and  Eng- 
lish. For  centuries  a  profitable  trade  between  temperate 
Europe  and  the  tropical  Orient  had  been  carried  on  by  way 
of  the  Persian  Gulf  and  the  river  Euphrates,  the  Black  Sea,  or 
the  Suez  routes.  Each  of  these  ways  was,  however,  succes- 
sively closed  to  Europe  by  the  conquests  of  the  Ottoman  Turks, 
and  it  became  necessary  either  to  forego  the  trade  or  to  discover 
a  new  route  to  India.  Then  it  was  that  the  westward  move- 
ment of  the  European  nations  began.  The  Portuguese  were 
the  first  to  push  their  daring  voyages  ever  further  southward, 
until,  in   1486,   PnrtVinloTyiAw    T2ia^   ronndprl    the   Gapfi-O^liC"^^- 

Hx>pfi.;  he  was  followed,  eleven  years  later,  by  Vasco  da  Gama, 
3  17 


18 


ECONOMIC    HISTORY    OF    THE    UNITED    STATES 


who  reached  Calicut  in  India  in  1498^  after  traversing  the 
unknown  Indian  Ocean.  Meanwhile,  Columbus,  seeking  a 
shorter  route  to  India  across  the  Atlantic,  made  his  great 
discovery  of  a  new  world  in  1492,     In  1519,  Magellan,  seeking 


C.  of  Good  nope^k^^^.oif<2.  1487 
or  C  of  Storms  '\~^ 


Trade  Routes  to  the  East 

The  closing  of  these  routes  through  the  conquests  of  the  Turks  deprived 
Europe  of  a  very  profitable  trade.  In  exchange  for  woolen  cloth,  lead, 
wine,  and  glassware,  Europeans  had  brought  back  from  the  East  spices, 
pepper,  cotton  cloth,  silks,  ivory,  precious  stones,  and  other  valuable 
articles.  The  importance  of  the  voyages  of  Diaz  and  Da  Gama  in  re-opening 
the  way  to  India  is  clearly  shown. 

a  w^estern  route  to  the  Molucca  Islands,  sailed  through  the 
straits  bearing  his  name,  as  far  as  the  Philippines,  where  he  was 
killed;  but  his  vessel,  the  Victoria,  continued  the  voyage  and 
reached  Spain  again  in  1522,  thus  being  the  first  one  to  cir- 
cumnavigate the  world.     In  1577,  Drake  repeated  the  exploit. 


EXPLORATION    AND    COLONIZATION  19 

These  voyages  caused  a  shifting  of  maritime  power  and 
paved  the  way  for  great  commercial  undertakings.  "  The 
effect  of  these  discoveries,"  says  Warner,  "  was  to  move  com- 
merce onwards  from  the  '  thalassic  '  stage,  the  stage  when  it 
goes  mainly  over  inland  seas,  to  the  '  oceanic  '  stage,  when  it 
extends  over  the  oceans,  and  so  all  around  the  world.  The 
highway  of  commerce  had  been  the  Mediterranean,  and  the 
Mediterranean  ports,  Venice,  Genoa,  Barcelona,  Marseilles, 
the  great  trading  centers.  But  when  the  Atlantic  became  the 
highway,  the  countries  that  looked  out  upon  it,  Spain,  Portu- 
gal, France,  Holland,  and  England,  were  given  new  oppor- 
tunities." The  new  world  now  became  the  scene  of  daring 
exploring  and  colonizing  expeditions  by  each  of  these  nations 
in  turn,  each  trying  to  secure  and  hold  the  prize  of  new  terri- 
tory and  new  wealth. 

18.  Spanish  explorations.  —  After  Portugal,  which  by  reason 
of  its  position  was  the  most  adventurous  maritime  nation  of 
Europe,  Spain  was 'the  first  in  the  field,  and  at  the  beginning 
seemed  destined  to  commercial  leadership.  Her  fortunate 
chance  in  being  the  first  to  discover  the  new  world  gave  her  a 
long  pre-eminence.  From  the  time  of  Columbus's  discovery, 
Spanish  exploration  and  conquest  were  extremely  rapid,  and 
by  the  middle  of  the  sixteenth  century  she  was  in  possession 
of  the  West  Indies,  of  Central  America,  and  of  a  large  part  of 
South  America.  Various  causes  combined  to  hold  the  Spanish 
in  the  Caribbean  Sea  and  the  Gulf  of  Mexico,  such  as  the  direct- 
ness of  the  route  thither  from  Spain,  and  the  presence  of  gold 
in  Peru  and  Mexico.  Fortunately,  perhaps,  for  the  United 
States  the  settlements  in  Florida  and  Louisiana  were  never 
developed,  the  principal  Spanish  settlements  being  those  in 
Cuba,  Porto  Rico,  Jamaica,  and  on  the  continent  of  Central 
and  South  America. 

The  Spaniard  was  essentially  an  adj^_nt.urer  and  conqueror 
rather  than  a  colonizer  and  laborer.  Throughout  his  period 
of  supremacy  in  America  he  devoted  himself  almost  exclu- 
sively to  the   mining  of  silver.     In   common  with  the  other 


20        ECONOMIC    HISTORY    OF    THE    UNITED   STATES 

nations  of  Europe  at  that  time,  Spain  regarded  her  colonies 
simply  as  sources  of  wealth  to  the  parent  state,  and  sought 
to  monopolize  their  products  by  the  most  jealous  colonial 
policy. 

19.  Decline  of  Spain's  power.  —  While  at  first  the  impor- 
tation of  the  precious  metals  from  America  into  Spain  had  a 
stimulating  effect  upon  industry  and  commerce,  in  the  long 
run  it  destroyed  the  industrial  spirit  of  the  people.  The  gold 
and  silver  were  drained  off  by  religious  wars,  or  went  to  other 
countries  to  pay  for  expensive  imports.  Toward  the  end  of 
the  sixteenth  century,  Spain's  commercial  and  maritime  power 
began  to  decline  rapidly,  and  by  the  middle  of  the  seventeenth 
century  (1648)  her  colonial  and  foreign  commerce  had  been 
almost  completely  destroyed.  Although  she  retained  most  of 
her  possessions  in  America,  and  in  fact  increased  them  until, 
in  1783,  she  held  sway  over  two  thirds  of  the  present  territory 
of  the  United  States,  her  hold  upon  them  was  always  slight. 
By  purchase,  conquest,  and  treaty  one  by  one  of  Spain's  pos- 
sessions in  North  America  has  slipped  from  her  nerveless  grasp, 
and  has  come  ultimately  into  the  possession  of  the  United 
States  —  Louisiana  in  1803,  the  Floridas  in  1819,  Texas  in 
1845,  New  Mexico,  Arizona,  and  California  in  1848,  and  Porto 
Rico  in  1898.  To-day  Spain  has  not  a  single  colony  on  either 
of  the  American  continents. 

20.  The  Dutch  settlements.  —  The  sixteenth  century  was 
the  great  age  of  the  two  Latin  peoples,  the  Spariiard^  and  the 
Portuguese;  the  seventeenth  century  may  be  said  to  belong 
commercially  to  the  Dutch.  Through  the  powerful  Dutch 
East  India  Company  they  had  gained  control  of  the  trade  of 
the  Orient.  With  the  decline  of  the  Spanish  maritime  power 
they,  in  common  with  the  French  and  English,  turned  their 
energies  to  the  New  World.  Even  before  this  they  had  en- 
gaged in  a  more  or  less  illicit  trade  with  the  West  Indies,  which 
was  greatly  extended  by  the  formation  of  the  West  India 
Company  in  1621,  to  which  were  given  exclusive  privileges, 
for  twenty-four  years,  to  trade  in  all  lands  bordering  on  the 


EXPLORATION    AND    COLONIZATION  21 

Atlantic.  In  1609,  Henry  Hudson,  an  Englishman  in  the 
employ  of  the  East  India  Company,  while  searching  for  a 
shorter  passage  to  India,  sailed  up  the  river  which  now  bears 
his  name.  Trading  posts  were  soon  erected  at  Amsterdam 
and  Orange  (now  New  York  and  Albany),  and  a  profitable  fur 
trade  commenced  with  the  Indians.  Beginning  with  1623,  colo- 
nies were  planted,  which  were  encouraged  at  first  by  the  estab- 
lishment of  patroonships,  or  large  semi-feudal  estates.  Later, 
trade  was  thrown  open  to  all  comers,  and  land  was  granted  in 
small  quantities  upon  payment  of  an  annual  quit  rent.  As 
the  colonies  grew,  they  drew  to  them  English  and  French  as 
w^ell  as  Dutch  settlers. 

Not  for  long,  however,  did  the  Dutch  remain  in  undisturbed 
possession  of  the  Hudson.  To  the  south  of  them,  colonies  of 
Swedes  appeared  on  the  Delaware,  and  to  the  northeast  the 
English  were  rapidly  crowding  into  New  England.  The  Dutch 
were  able  to  conquer  the  Swedes,  in  1655,  but  were  themselves 
expelled  in  1664  Ijy  the  English.  During  the  eighteenth  cen- 
tury, Holland's  commercial  supremacy  gradually  declined,  and 
her  pre-eminence  passed  into  the  hands  of  the  French  and 
English,  her  greatest  rivals.  Of  their  colonial  possessions  in 
the  New  World  the  Dutch  retain  to-day  only  Guiana  in  South 
America. 

21.  French  colonization.  —  Frenchmen  had  frequented  the 
fishing  banks  off  Newfoundland  as  early  as  1504,  but  they  did 
not  make  any  permanent  settlement  in  North  America  before 
the  reign  of  Henr^  IV  (1594-1610).  By  1608,  however.  Port 
Royal  was  held,  Quebec  founded,  and  the  colony  of  New  France 
established.  After  the  death  of  Henry  IV,  little  more  in  the 
way  of  colonization  was  attempted  for  a  century,  during  which 
the  prosperity  of  France  at  home  was  checked,  and  she  was 
plunged  into  a  series  of  expensive  wars.  At  the  beginning  of 
the  eighteenth  century,  French  commerce  began  to  expand 
again,  and  upon  the  decline  of  Holland's  supremacy,  she  pre- 
pared to  dispute  the  position  of  leader  with  England.  This 
contest  for  control  was  fought   out  largely  in  America,  and 


22         ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

its  outcome  had  an  important  bearing  on  the  future  of  the 
American  colonies. 

In  1718,  New  Orleans  was  founded.  A  little  later  the 
Mississippi  Bubble  was  launched  in  France;  while  this  was 
unsuccessful,  it  had  the  effect  of  directing  attention  to  colonial 
enterprises,  and  led  to  a  more  liberal  colonial  policy.  In  time, 
other  colonies  were  established  higher  up  the  Mississippi  River, 
while  the  French  in  Canada  pushed  their  settlements  toward 
the  headwaters.  Attempts  made  to  connect  these  distant 
posts  brought  them  into  collision  with  the  English,  who  had 
meanwhile  pushed  out  westward  into  the  rich  fur  country  along 
the  Ohio  River.  The  conflict  thus  brought  about  rapidly  de- 
veloped, in  1756,  into  the  Seven  Years'  War,  which  was  finally 
terminated,  in  1763,  by  the  Peace  of  Paris.  By  this  treaty, 
France  ceded  to  Great  Britain  all  her  possessions  in  North 
America  east  of  the  Mississippi.  Spain,  on  her  part,  ceded  to 
Great  Britain  her  colony  of  Florida  in  exchange  for  Havana, 
which  the  English  had  occupied  during  the  war.  To  recom- 
pense Spain  for  this  loss,  France  ceded  to  her  all  of  the  French 
possessions  in  America  west  of  the  Mississippi.  This  treaty 
marked  the  permanent  withdrawal  of  France  from  North 
America,  except  for  the  temporary  possession  of  the  Louisiana 
territory,  1800-1803. 

The  effect  of  this  treaty  upon  the  settlers  in  what  is  now 
the  United  States  was  very  important.  Relieved  of  all  danger 
from  an  harassing  enemy,  they  devoted  themselves  to  the 
development  of  their  material  resources  with  new  energy.  At 
the  same  time  the  administration  by  the  English  authorities  for 
the  government  of  their  enlarged  dominions  began  to  appear, 
both  politically  and  economically,  exceedingly  burdensome. 
The  discussion  of  this  subject  leads  to  a  consideration  of 
English  colonization. 

22.  English  exploration.  —  Although  finally  outstripping  all 
her  rivals,  England  was  the  last  in  the  field  in  exploring  and 
colonizing  the  new  world.  Internal  affairs  had  absorbed  the 
energies  of  rulers   and  people  until  the  period   of  wonderful 


SCALE  OF  MILES 


0  200  ^  400  GUO  aoo 

L.L.POATES,  EN6R'S,C0..  N.r. 


120  Lr.iiLMtu.lc  \V.->t  lltO  fioiii  Greeiiwiih  SO 


EXPLORATION    AND    COLONIZATION  23 

commercial  expansion  under  Elizabeth.  The  latter  part  of 
the  sixteenth  century  was  a  time  of  great  economic  disturbance 
in  England,  during  which  the  exploits  of  the  English  adven- 
turers and  explorers  aroused  general  interest.  Such  men  as 
Hawkins,  Drake,  Grenville,  Oxenham,  Raleigh,  and  others, 
were,  however,  simply  the  vanguard  of  the  real  colonizing 
movement  which  came  later.  At  the  end  of  Elizabeth's  reign 
England  had  acquired  nothing  on  the  mainland  of  America. 
It  was  not,  indeed,  until  the  dream  of  finding  gold  had  been 
dispelled,  that  permanent  settlements  became  possible.  When 
to  the  willingness  to  engage  in  the  work  of  cultivating  the  soil 
there  was  added  the  further  motive  of  establishing  a  home 
where  a  man  could  worship  God  in  his  own  fashion,  then  real 
progress  began. 

23.  The  English  colonies.  —  In  1607,  at  Jamestown,  the 
first  settlement  was  established,  the  germ  of  the  United  States 
of  to-day.  The  colonists,  who  were  ill  designed  for  such  a 
task,  were  held  together  only  by  the  firmness  of  their  leader, 
John  Smith,  who  insisted  that  "  nothing  was  to  be  expected 
but  by  labour."  They  experienced  severe  hardships  and 
twice  nearly  abandoned  the  colony,  but  with  the  rapid  increase 
in  the  consumption  of  and  demand  for  tobacco  all  over  Europe, 
they  soon  fell  upon  more  prosperous  days. 

The  year  1620  witnessed  the  settlement  of  Plymouth,  in 
New  England,  by  the  Pilgrims.  In  spite  of  suffering  at  first, 
they  soon  established  themselves  firmly  in  their  new  home. 
They  were  a  brave,  industrious,  religious,  and  liberty-loving 
set  of  men,  who  had  left  England  rather  than  conform  to  the 
established  church,  and  were  both  willing  and  able  to  endure 
the  hardships  of  a  pioneer  life.  Attracted  by  the  slender 
success  of  the  Plymouth  experiment,  fishing  stations  were 
established  on  the  Maine  coast,  and  then  more  permanent 
colonies  in  rapid  succession:  Massachusetts  Bay,  Maryland, 
Connecticut,  Rhode  Island,  New  York,  New  Jersey,  the  Caro- 
linas,  and  Pennsylvania.  Except  during  the  period  of  the 
''  great  emigration  "  (1630-40)  the  population  of  the  colonies 


24        ECONOMIC    HISTORY    OF    THE    UNITED   STATES 

grew  but  slowly;  by  1700  the  total  number  of  inhabitants  was 
only  250,000.  Economic  progress,  too,  was  slow  during  the 
seventeenth  century,  owing  to  the  restrictive  commercial 
policy  of  England. 

24.  The  mastery  of  the  English.  —  During  the  eighteenth 
century  the  English  colonies  in  America  developed  quite 
rapidly.  Georgia  was  the  only  new  colony  added  to  the  list 
already  given,  but  the  population  in  the  older  colonies  con- 
tinued to  increase;  by  1760,  the  English-American  colonists 
numbered  approximately  one  million  six  hundred  thousand 
persons,  white  and  black,  and  occupied  a  narrow  strip  of  coast 
almost  continuously  from  Georgia  to  Nova  Scotia.  The  Ohio 
valley  had  already  been  successfully  disputed  with  the  French, 
and  to  the  north  England  had  secured  possession  of  the  Hud- 
son Bay  Territory,  Newfoundland,  and  Nova  Scotia.  Thus 
the  English  race,  the  last  in  the  field,  had  obtained  possession 
of  practically  all  the  settled  portion  of  North  America.  Their 
success  must  be  attributed  mainly  to  the  character  of  the 
people  who  had  essayed  this  difficult  task  of  conquering  and 
settling  a  new  world.  Hardly  less  important,  however,  in 
stimulating  and  developing  this  character  were  the  institutions 
of  the  people,  growing,  as  they  were,  more  and  more  free  and 
democratic. 

Of  the  four  important  European  nations  which  settled  in 
the  territory  now  included  in  the  United  States,  the  English 
nation  was  the  only  one  which  succeeded  in  maintaining  a 
permanent  foothold.  The  Spanish,  the  first  on  the  scene  and 
the  last  to  retire  therefrom,  owed  their  failure  to  the  despotic 
character  of  their  government,  their  ruinous,  commercial  policy, 
and  their  lack  of  permanent  settlements.  Holland  lost  her 
possessions  on  the  Hudson  River  chiefly  owing  to  her  faililie  to 
encourage  the  growth  of  colonies  of  small  land  owners,  and 
also  to  the  strategic  importance  to  England  of  New  Nether- 
lands. Finally,  tlie  policy  of  France,  by  which  the  population 
was  placed  arbitrarily  in  sca.t.t_exed-  military  OAitpoats  instead 
of  being  permitted  to  effect  compact  settlements  of  home- 


24         EC^ONOMIC   HISTORY    OF    THE    UNITED    STATES 

o-rew  -^Sj  made  her  yield  to  the  EngUsh  colonists  when  the  final 
Qnl-i-iflict  came.  On  the  other  hand,  the  home-making  instinct 
s(vi"  the  English  had  meantime  built  up  permanent  settlements 
along  the  whole  Atlantic  coast,  while  the  natural  mountain 
barrier  to  the  east  had  held  them  compacted  until  they  were 
strong  enough  to  advance  beyond  it.  When  that  time  arrived, 
their  expansion  was  irresistible.  For  the  first  one  hundred 
and  fifty  years  of  their  existence,  too,  the  relations  between 
the  colonies  and  the  mother  country  were  close  and,  on  the 
whole,  most  friendly.  The  trade  of  the  colonies  with  England 
kept  growing  steadily  throughout  this  period  from  about 
$3,250,000  in  1698  to  $10,000,000  in  1751,  and  $27,250,000  in 
1771;  the  total  trade  of  the  colonies  for  1771  was  only  about 
$30,000,000,  so  it  is  evident  that  most  of  it  was  with  Eng- 
land. 

25.  The  United  States.  —  The  expulsion  of  the  Dutch  in  the 
seventeenth  and  of  the  French  in  the  eighteenth  century  had 
left  England  mistress  of  practically  the  whole  of  the  eastern 
half  of  North  America.  By  the  war  of  the  Revolution,  the 
new  nation  of  the  United  States  of  America  fell  heir  to  the 
territory  south  of  the  St.  Lawrence  and  east  of  the  Mississippi 
(with  the  exception  of  the  Spanish  possession  of  Florida), 
comprising  827,844  square  miles.  Since  that  time  the  area  of 
the  United  States  has  been  increased  by  the  additions  shown 
in  the  table  on  the  following  page. 

26.  Motives  for  exploration  and  colonization :  Political.  — 
In  view  of  the  general  movement  toward  exploration  and 
settlement,  not  merely  of  America,  but  of  all  the  newly  dis- 
covered territories,  it  is  worth  while  to  ask  ourselves  what  the 
motives  were  which  produced  such  widespread,  almost  con- 
certed, action  on  the  part  of  the  most  important  nations. 
These  were  different  in  the  case  of  different  nations,  some 
emphasizing  motives  which  were  subordinate  in  the  case  of 
others,  but  in  the  main  they  were  economic  —  greed  of  gold, 
desire  for  territory,  to  secure  an  outlet  for  surplus  population 
or  a  market  for  goods.     Partly,  too,  they  were  political  and. 


EXPLORATION    AND    COLONIZATION 


27 


religious,  and  at  these  we  may  briefly  glance  before  proceeding 
to  enumerate  the  others. 

Additions  to  the  Territory  of  the  United  States  from  1800  to  1900 


TERRITORIAL    DIVISION 

Year 

Area  added 

Purchase 
price 

Louisiana  purchase 

Florida    

Texas                                        

1803 
1819 
1845 
1846 
1848 
1850 

Square  miles 
875,025 
70,107 
389,795 
288,689 
523,802 
(c) 

36,211 

599,446 

6,740 

3,600 

175 

143,000 

73 

68 

Dollars 

15,000,000 

a  6,489,768 

Oregon  Territory 

618,250,000 
10,000  000 

Purchase  from  Texas    

Gadsden  purchase                  

1853 
1867 
1897 
1898 
1898 
1899 
1899 
1901 

10,000,000 
7,200,000 

Alaska 

Hawaiian  Islands    

Porto  Rico         .        

Guam                                        

Philippine  Islands 

20,000,000 

Additional  Philippines 

100,000 

Total       

2,936,731 

87,039,768 

a  Includes  interest  payment. 

b  Of  which  $3,250,000  was  in  payment  of  claims  of  American  citizens 
against  Mexico. 

c  Area  purchased  from  Texas  amounting  to  123,784  square  miles  is  not 
included  in  the  column  of  area  added,  because  it  became  a  part  of  the  area 
of  the  United  States  with  the  admission  of  Texas. 


Political  aims  were  present  in  the  case  of  the  English  in  all 
schemes  for  colonizing  North  America.  The  settlement  of 
Virginia  was  regarded  as  a  check  to  the  northward  spread  of 
Spanish  settlements,  and  was  considered  a  proper  defiance 
of  the  Spanish  claim  to  the  whole  continent  under  the  famous 
bull  of  Pope  Alexander  VI,  which  dividedthe  new  world  between 
Spain  and  Portugal.     Rivalry  with  Spain  was  a  note  that  ran 


28        ECONOMIC   HISTORY    OF    THE    UNITED   STATES 

through  all  the  work  of  exploration  and  settlement,  not  merely 
of  England,  but  of  Holland  and  France  also.  Political  dis- 
affection at  home,  as  during  the  period  of  the  "  great  migra- 
tion ''  from  England,  also  drove  many  settlers  across  the  • 
Atlantic  in  search  of  liberty  and  of  freedom  from  oppressive 
laws. 

27.  Religious  motives.  —  Closely  connected  with  these  were 
the  religious  motives.  The  antag^onism  of  protestant  England 
to  Catholic  Spain  was  largely  religious.  Captain  John  Smith- 
declared  the  first  object  of  the  Virginia  Plantation  was  "to 
preach  and  baptize  into  the  Christ ian_Religion,  and  by  the 
propagation  of  the  Gospell,  to  recover  out  of  the  arms  of  the 
Devill,  a  number  of  poore  and  miserable  soules  wrapt  up  unto 
death  in  almost  invincible  ignorance."  The  religious  impulse 
w^as  also  strongly  at  work  in  New  England.  The  Pilgrin 
Fathers  sought  to  establish  a  colony  in  which  they  could  wor- 
ship after  their  own  fashion,  and  in  which  church  membership 
was  made  the  condition  of  citizenship.  Other  PUnglish  settle- 
ments were  made  to  permit  the  free  exercise  of  different  relig- 
ious convictions:  Maryland  was  a  Roman  Catholic  settlement; 
Rhode  Island  was  founded  by  Roger  Williams  to  secure  liberty 
of  conscience;  the  Quaker  colony  of  Pennsylvania  was  essen- 
tially religious. 

Spanish  and  French  efforts  at  colonization  were  also  con- 
ceived largely  in  a  missionary  spirit.  -  The  missionaries  of 
these  nations  preceded  even  the  traders  and  -settlers,  and 
opened  the  way  for  the  spread  of  colonies,  as  in  the  west  and 
southwest  of  North  America. 

28.  Economic  motives.  —  The  main  impulse  in  the  work  of 
colonization,  however,  was  economic.  The  new  world  offered 
an  opportunity  for  large  gains  and  for  the  profitable  investment 
of  capital.  The  desire,  for  the  precious  metals  was  probal:)ly 
the  most  universal  and  powerful  motive  to  the  exploration 
and  settlement  of  America.  The  first  quest  of  the  earlier 
expeditions  was  always  gold,  and  the  search  for  this  elusive 
commodity  led  to  the  exploration  of  most  of  the  two  continents. 


EXPLORATION   AND    COLONIZATION  29 

pain  won  the  chief  prize  in  this  respect,  and  her  success  both 
azzled  other  nations  and  stimulated  them  to  similar  effort, 
he  Spanish  colonies  were  founded  with  the  purpose  of  ex- 
loiting  the  mines  of  gold  and  silver.  While  other  economic 
nd  commercial  motives  were  of  greater  importance  in  the 
English  settlements,  yet  in  the  earlier  expeditions  this  was 
redominant  with  them  also. 

The  most  potent  reason  for  the  early  explorations,  together 
/ith  the  probable  presence  of  gold,  was  the  search  for  a  shorter 
oute  to  India.     It  was  this  that  led  Columbus  to  the  west 
cross  the  Atlantic,  and  that  motive  still  held  in  the  Spanish 
nind  until  Magellan  sailed  through  the  straits  which  bear  his 
tame.     It  was  this  feat  of  Magellan's  and  the  earlier  rounding 
•f  the  Cape  of  Good  Hope  by  the  Portuguese  that  directed 
Jnglish  energies  into  this  channel  for  so  many  years.     Accord- 
ng  to  the  then  prevailing  principles  of  international  law  the 
itle  to  the  ocean  routes  to  India  belonged  to  Spain  and  Por- 
ugal.     Hence  the  English  sent  expedition  after  expedition  to 
he  northeast  of  North  America  in  search  of  this  elusive  pas- 
sage.    Such  a  route,  if  discovered,  would  not  only  be  English; 
t  would  have  the  additional  advantage,  by  passing  through 
I  cold  climate,  of  opening  up  a  market  for  England's  great 
staple,   cloth.     The   pursuit   of  this   chimera   of  a   Northwest 
Passage   continued   for  a   hundred   years  —  Frobisher    (1576) 
mailed  in  search  of  it;  Davis  (1586),  Hudson  (1607  and  1610), 
Baffin   (1615),  Fox,  James    (1631),  and  others,  went   on  the 
same  fruitless  mission. 

There  was  also  a  quest  for  new  markets  for  the  growing 
manufactures.  Hakluyt  tells  us  this  as  early  as  1553:  ''At 
what  time  our  merchants  perceived  the  commodities  and 
goods  of  England  to  be  in  small  request  with  the  countries  and 
people  about  us  and  near  to  us,  and  that  those  merchandises 
which  strangers  did  earnestly  desire  were  now  neglected  and 
the  price  thereof  abated,  though  by  us  carried  to  their  own 
ports,  and  all  foreign  merchandises  of  great  account,  certain 
grave  citizens  of  London  began  to  think  how  this  mischief 


.  L.  PO*TES  ENSR'6  CO.,N 


EXPLORATION    AND    COLONIZATION  31 

might  be  remedied.  Neither  was  a  remedy  wanting  —  for  as 
the  wealth  of  the  Spaniards  and  Portuguese,  by  the  discovery 
and  search  of  new  trades  and  countries,  was  marvellously 
increased;  supposing  the  same  to  be  a  means  for  them  to 
obtain  the  like,  they  thereupon  resolved  upon  a  new  and 
strange  navigation." 

But  not  only  was  a  market  desired  for  English  exports;  a 
source  of  supply  of  the  raw  materials  and  other  articles  which 
the  English  people  were  at  that  time  compelled  to  purchase 
from  foreign  nations  was  sought.  England  imported  her 
naval  stores  from  Russia  and  Poland;  cojjper  from  Sweden; 
wines,  salt,  and  canvas  from  France;  silks  and  velvets  from 
Italy;  spices  from  the  Indies.  All  these,  it  was  thought,  could 
be  obtained  from  the  new  world,  and  all  the  early  reports 
give  glowing  accounts  of  the  natural  productiveness  of  the 
country.  At  the  same  time,  this  vast  interchange  of  goods 
between  England  and  the  new  world  would  stimulate  the 
growth  of  the  English  merchant  marine,  and  train  up  a  sturdy 
set  of  English  seamen. 

The  effect  of  the  fisheries  in  direc^^^g  w>in1p  f^PPf^  nf  Rtwlic^K^ 
French,  and  Dutch  fishing  vessels  to  the  Newfoundland  Banks 
and  down  the  New  England  coast  was  felt  before  the  true  era 
of  colonization  began.  Communication  between  Europe  and 
North  America  had  been  constant  for  a  century  before  the 
settlement  of  Jamestown,  and  a  thorough  exploration  of  the 
coast  had  been  made.  After  the  settlement  of  the  continent 
began  the  furjrade  was  equally  important  in  sjimuktin^ 
exrtkniation  of  the  interior,  and  in  providino;  the  material  for^a 
lucrative  commerce. 

A  final  reason  which  found  expression  in  contemporary 
writings  was  that  the  new  settlements  would  furnish  an  outlet 
for  thft^urplus  population  of  England.  Throughout  the  six- 
teenth and  seventeenth  centuries  there  were  many  complaints 
of  the  redundancy  of  the  population.  The  cessation  of  the 
Elizabethan  wars  left  many  adventurers  without  an  occupa- 
tion,  and  the  substitution  of  sheep  pastures  for  farms  had 


32         ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

thrown  multitudes  out  of  work.     All  these,  it  was  hoped,  w^ould 
find  employment  in  the  new  colonies. 

SUGGESTIVE  TOPICS  AND  QUESTIONS.     CHAPTER    II 

1.  "Name  at  least  four  important  inventions  or  discoveries  which 
closed  the  Middle  Ages,  and  show  how  each  of  them  atfected  Columbus's 
undertaking."  —  Channing.  [Morris,  Civihzation,  II,  11,  87;  Webster, 
Hist,  of  Commerce,  108.] 

2.  Trace  the  migration  of  commercial  supremacy  among  nations. 
[Morris,  Civihzation,  II,  chap.  16;  Brooks  Adams,  American  Economic 
Supremacy.] 

3.  When  did  the  Pacific  Ocean  first  become  important  in  the  commerce 
of  the  world?     How  has  it  compared  with  the  Atlantic? 

4.  Why  was  it  considered  necessary  in  the  fifteenth  century  to  find 
a  new  route  to  India?  [Semple,  Amer.  Hist,  and  Geographic  Conditions, 
1-3;  Fiske,  Discovery  of  America,  I,  chap.  4.] 

5.  Are  there  any  economic  reasons  why  the  early  discovery  of  America 
by  the  Northmen  should  have  been  without   efTect?     [Semple,  id  supra, 

6.  What  useful  services,  if  any,  did  the  English  buccaneers  perform? 
[Lucas,  Historical  Geography,  II,  55;  Encyclopaedia  Britannica,  art. 
"Buccaneers."] 

7.  "Why  has  the  English  race  supplanted  the  Spanish  and  French 
races  in  North  America?"  [Wilson,  Hist,  of  Amer.  People,  II,  chap.  2; 
Fiske,  New  France  and  New  England,  chaps.  1-4;  Semple,  Amer.  Hist,  and 
Geog.  Cond.,  25-31;  Bancroft,  Hist,  of  U.  S.,  IV,  128-130.] 

8.  Why  did  the  Enghsh  expel  the  Dutch  from  New  Netherlands? 
[Wilson,  Hist,  of  Amer.  People,  I,  165;  Winsor,  America,  III,  421-424.] 

9.  Are  there  any  relics  to-day  of  the  Dutch  patroonates? 

10.  Do  we  owe  any  distinctive  elements  of  our  national  character 
or  progress  to  the  Dutch  settlers?  [Roberts,  New  York,  chaps.  3,  4,  5; 
Fiske,  Dutch  and  Quaker  Colonies  in  America,  II,  chap.  17.] 

11.  Show  the  effect  of  the  Seven  Years'  War  on  the  history  of  France, 
England,  and  America.  [Hinsdale.  Old  Northwest,  chap.  5;  Winsor,  Amer- 
ica, V,  chap.  8;  Lecky,  Hist,  of  England,  III,  chap.  12.] 

12.  What  was  John  Law's  " Mi.ssissippi  Bubble"?  [Johnson.  Great 
Events  by  Famous  Historians,  XIII,  1-15;  Nicholson,  Money  and  Mone- 
tary Problems,  165-207;  Encyclopaedias.] 

13.  What  are  the  important  colonizing  nations  to-day?  Why  did 
not  Germany  have  a  share  in  colonizing  North  America  in  the  seventeenth 
and  eighteenth  centuries? 

14.  What  is  the  policy  of  the  L^nited  States  in  dealing  with  her  colonial 


EXPLORATION   AND    COLONIZATION  33 

possessions  at  present?     [Willoughby,  Territories    and   Dependencies  of 
the  U.  S.;  Ireland,  The  Far  Eastern  Tropics.] 

15.    Read  Kingsley's  "Westward  Ho!"  and  tell  what  you  think  of  it. 

SELECTED   REFERENCES.     CHAPTER    II 

**Brown:    Genesis  of  the  United  States. 

**Bruce:    Economic  History  of  Virginia,  I,  chap.  1. 

*Cheyney:   European  Background  of  American  History. 

*Eggleston:    Beginners  of  a  Nation,  book   I,  chaps.  1-3. 

**Seeley:   The  Expansion  of  England,  chaps.  4,  7. 

*  Warner:    Landmarks  in  English  Industrial  History,  150-262. 

*Weeden:   Economic  and  Social  History  of  New  England,  I,  chap.  1. 

Blackmar:   Spanish  Institutions  of  the  Southwest,  chap.  14. 

Cunningham:   Western  Civilization,  II,  138-177. 

Hart:   American  History  told  by  Contemporaries,  I,  145-170. 

Thwaites;    France  in  America,  1497-1763. 

Traill:    Social  England,  III,  477-507;  IV,  51-66. 

Webster:    General  Histoiy  of  Commerce,  chaps.  14-20. 


I 


PART   I 

COLONIAL   DEVELOPMENT 

CHAPTER   III 
ENGLISH   COLONIAL  THEORY   AND   POLICY 

29.  Economic  conditions  in  Europe  during  the  sixteenth  and 
seventeenth  centuries.  —  The  discovery  of  the  new  world  and 
of  a  shorter  route  to  India  had  exercised  a  revokitionary 
effect  upon  the  countries  of  Europe.  The  flood  of  silver  which 
followed  the  opening  of  the  South  American  mines  had  assisted 
in  breaking  up  the  feudal  system  of  payment  in  kind,  and  in 
substituting  a  money  economy.  Throughout  the  sixteenth 
and  seventeenth  centuries  trad£  and  communication  were 
expanding.  Powerful  states  were  forming,  with  paid  armies, 
and  to  secure  the  needed  revenue  to  pay  them  it  became  neces- 
sary to  develop  taxation.  As  manufsLctures  in  the  towns  yielded 
greater. revenues  than  agricultujre,  they  were  selected  for  especial 
encouragement  by  the  state.  Further,  it  was  evident  that  only 
as  the/state  was  powerful'^ould  it  help  its  citizens  in  their  com- 
petition with  citizens  of  other  countries,  or  itself  carry  on  suc- 
cessful commercial  struggles  with  rival  nations.  Accordingly  a 
definite  economic  policy  was  formulated,  of  which  the  govern- 
ment was  the  head.  The  aim  was  so  to  regulate  industry 
that  the  "state  should  be  made  strong  and  powerful.  The  set 
of  measures  by  which  this  national  power  was  to  be  developed 
is  called  the  mercantile  system;  and  it  was  under  the  influence 
of  this  system  that  not  only  England,  but  all  European  coun- 
tries, regulated  their  trade  and  commerce  during  this  period. 

30.  The  Mercantile  system.  —  The  aims  of  the  mercantile 
system  in  England  have  been  classified  by  Warner  under  four 

34 


ENGLISH    COLONIAL    THEORY    AND    POLICY  35 

main  heads:  (1)  the  policy  of  eniiDiiragiiig  native  shipping  by 
navigation  acts,  in  order  that  the  realm  might  have  plenty  of 
ships  and  sailors  from  which  an  efficient  navy  could  be  formed; 
(2)  the  policy  of  protecting_  and  helping  native  grain  growers, 
in  order  that  England  should  be  independent  of  food  from 
outside,  and  should  always  be  able  to  feed  the  population  from 
her  own  land;  (3)  the  policy  of  protecting  home  industries,  and 
of  planting  new  ones  to  give  employment  to  native  artisans; 
and  finally,  (4)  the  policy  of  amassing  and  keeping  in  the  coun- 


rl^ 


try  a  large  amount  of  money. 

31.  Protection  to  shipping.  —  As  early  as  the  reign  of 
Richard  II  (1377-1399)  it  was  enacted  that  ''  none  of  the 
King's  liege  people  should  ship  any  merchandise  out  of  or  into 
the  realm,  except  in  the  ships  of  the  king's  ligeance,  on  pain  of 
forfeiture."  Under  Henry  VII  (1485-1509)  and  Elizabeth 
(1558-1603)  similar  laws  were  passed.  The  best  known  legis- 
lation for  this  purpose  was  the  famous  navigation  acts,  which 
were  passed  in  1651  under  Cromwell,  and  made  more  severe 
in  1660.  These  prohiMted  the  carrying  of  goods  to  and  from 
England  in  any  but  British  built  and  manned  vessels. 

But,  to  develop  the  English  merchant  marine,  it  was  neces- 
sary not  merely  to  secure  a  monopoly  of  the  carrying-trade, 
but  also  to  train  up  sailors,  encourage  ship-building,  and 
provide  an  adec^uate  supply  of  naval  materials.  We  find, 
accordingly,  'legislation  directed  to  each  of  these  ends.  Since 
fishermen  made  good  sailors  every  encouragement  was  given 
to  their  industry.  As  the  simplest  way  was  to  increase  the 
demand  for  fish,  an  act  was  passed  in  1548,  "  in  order  that  the 
Fishers  may  be  set  on  work,"  directing  that  fish  must  be  eaten 
two  days  a  week  throughout  the  year  as  well  as  during  Lent. 
Later,  bounties  were  given.  Ship-building  was  encouraged 
rather  indirectly  by  clearing  the  sea  of  pirates  and  making  the 
ocean  a  safer  place  for  travel.  Finally,  strong  efforts  were 
made  to  secure  the  production  of  naval  stores  in  the  colonies, 
especially  flax,  hemp,  tar,  and  pitch,  though  never  very  suc- 
cessfully. 


36        ECONOMIC   HISTORY    OF    THE    UNITED    STATES 

32.  Protection  to  agriculture  and  industry.  —  The  policy  of 
making  England  strong  by  building  up  a  powerful  navy  found 
its  application  to  agriculture  and  manufacturing  in  an  effort 
to  make  the  country  economically  self-sufficient.  In  respect  to 
agriculture,  it  was  desired  to  raise  enough  food  in  England  to 
support  the  population,  and  not  less  to  develop  a  sturdy  yeo- 
manry who  should  serve  as  soldiers  in  time  of  war.  Accord- 
ingly, the  enclosure  of  arable  land  was  restricted,  and  the 
import  of  grain  forbidden  or  limited;  the  expoxtatiaH~of  raw 
materials   was   also   prohibited.     To   encourage   home   manu- 

/facturing  industries  and  provide  employment  for  the  people 
the  importation  of  various  foreign  wares  was  forbidden,  as 
woolens,  silks,  iron,  leather  goods,  hats,  and  many  smaller 
articles.  The  underlying  principle  was  the  same  in  all  these 
provisions  —  to  make  England  and  the  English  people  strong 
at  the  expense  of  other  nations. 

33.  Money  and  the  balance  of  trade.  —  But  the  mercan- 
^  tilist  doctrines  found  their  fullest  expression  in  the  legislation 

with  regard  to'^money;  this  was  the  key-note  of  the  whole 
policy.  The  doctrine  was  a  simple  one:  money  is  the  most 
general  and  universally  desired  form  of  wealth;  the  nation,  like 
the  individual,  is  richest  which  has  the  largest  store  of  gold 
and  silver;  riches  bring  power,  and  it  is  therefore  necessary  for 
a  successful  nation  to  secure  a  bountiful  supply  of  money. 
Thus,  Spain,  which  controlled  the  silver  mines  of  America, 
was  one  of  the  most  powerful  nations  of  Europe.  But  since 
England  possessed  no  mines,  she  could  g£L-XaQll£X..::QJaly  in 
^e^changfi^fox^-goads;  in  order  to  do  this,  she  must  export  as 
many  commodities  as  possible  and  import  as  few  as  possible, 
except^raw  materials,'  taking  the  difference  in  money.''  This 
difference  was  called  the  balance  of  trade,  and  was  said  to  be 
favorable  when  an^xcess  of  exports  over  imports  brought  in 
money;  unfavorable,  when  the  reverse  was  the  case.  In 
order  to  maintain  a  favorable  balance  of  trade  the  govern- 
ment must  resort  to  many  expedients  —  high  .duties  on 
ijiipo^ts  or^their_.prahifeition,  bounties  on  the  exports  of  home 


ENGLISH    COLONIAL    THEORY    AND   POLICY  37 

productions,   and   restrictions   upon    the    exportation    of   the 
precious  metals,,- 

34.  English  colonial  policy.  —  The  doctrines  of  the  mer- 
cantile system,  applied  to  the  colonies,  resulted  in  a  policy  by 
which  their  resources  were  used  to  make  England  powerful. 
To  build  up  English  shipping,  agricultures,  and  m^mifacUires,  J 
and  to  sppTjrfiji  f^vornK[p  bpjnncip.  of  t£ade,  was  the  object  of 
English Tegislatl^on  during  the  whole  of  the  colonial  period. 
In  this  policy  the  colonies  were  regarded  as  feeders  merely, 
supplying  the  raw  material  for  English  manufactures  and  a 
market  for  the  finished  goods,  while  a  large  exchange  of  com- 
modities between  the  colonies  and  the  mother-country  pro- 
vided a  profitable  carrying-trade  for  English  ships.  Accord- 
ingly the  manufacture  in  the  colonies  of  such  goods  as  could 
be  made  in  and  exported  from  England  was  forbidden.  Such 
colonial  products,  moreover,  as  were  desired  at  home,  the 
colonies  were  forbidtlen  to  send  anywhere  except  to  England; 
while  otlp^f-good,s,  which  would  compete  with  English  interests, 
were  prohibited  from  being  sent  to  England,  although  they 
could  be  exported  to  certain  other  countries.  The  first  group, 
which  was  ^'  enumerated  "  in  the  law,  consisted  of  commodities 
not  produced  at  all  in  England,  as  coffee,  indigo,  tobacco,  ! 
beaver  skins,  dyes,  etc.,  or  of  products  Avhose  home  supply 
was  insufficient,  as  naval  stores,  masts,  tar,  pitch,  pig  iron,  pot 
and  pearl  ashes,  etc.  The  second  group,  of  "  non-enumer- 
ated "  products,  consisted  of  such  articles  as  grain,  salt  pro- 
visions, fish,  and  rum. 

The  general  principle  then  was  that  the  colonies  should  be 
used  for  the  benefit  of  the  mother-country,  and  is  well  expressed 
in  Lord  Sheffield's  famous  observation  that  ''the  only  use  and 
advantage  of  American  colonies,  or  West-India  Islands,  is  the 
monopoly  of  their  consumption  and  the  carriage  of  their 
produce."  There  was  indeed  a  certain  justification  for  this 
position  as  the  colonies  were,  at  least  during  the  eighteenth 
century,  a  constant  expense  to  England,  and  it  seemed  only 
fair,  therefore,  for  the  mother-country  to  use  their  resources  for 


38         ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

her  profit.  The  attitude  of  England  in  this  regard  was  con- 
sidered by  Adam  Smith  "  less  ilHberal  "  than  that  of  other 
nations.  No  country  allowed  foreigners  to  engage  in  trade 
with  its  colonies;  such  was  the  policy  of  Spain,  Holland,  and 
France,   as  well   as   England.' 

35.  Early  commercial  freedom  of  the  colonies.  —  When  the 
first  settlements  were  made  in  America  they  were  granted 
cGmpLet£._£ieniptk»n  from  trade  restrictions.  The  Virginia, 
^Maryland,  and  Plymouth  companies  all  received  various  con- 
cessions, as  freedom  from  duties,  use  of  their  own  revenues, 
etc.,  designed  to  encourage  the  colonization  and  development 
of  the  country.     According  to  the  first   charter  granted  the 

Jamestown  colony  thpir  traHp  was  nppn  tn  ftny  fnrpignpr  upon 

payment  of  a  small  duty.  In  1624.  however,  James  I  dis- 
solved the  company  and  thereafter  tohficco  was  exported  only 
to  England.  The  ^;owing  trade  with  Honand_was  thus  nipped 
in  the  bud,  and  the  possible  revenues  from  duties  on  imports 
into  England  were  reserved  for  the  crown.  In  general,  there 
was  practical  freedom  of  trade  on  the  part  of  the  colonies  up 
to  the  time  of  the  Navigation  Ordinance  of  1651. 

36.  The  Navigation  Ordinance  of  1651.  —  This  famous  act, 
enacted  by  Cromwell,  w^as  directed  against  the  Dutch,  who  at 
this  time  were  the  carriers  of  the  world's  commerce.  It  was 
desired  both  to  cripple  Holland,  and  to  build  up  English 
shipping  by  confinin^f  English  trade  to  English  vessels.  The 
policy  was  successful,  and  England  soon  supplanted  Holland 
as  the  foremost  maritime  power.  The  act  provided  that  all 
products  ''  of  the  growth,  production,  or  manufacture  of  Asia, 
Africa,  or  America,  or  of  any  part  thereof,  ...  as  well  of  the 
English  plantations  as  others,"  could  be  imported  into  Eng- 
land or  its  territories  only  in  English-built  and  English-manned 
vessels.  The  word  "  English  "  included  also  the  colonists.  By 
this  act,  therefore,  a  monopoly  of  the  commerce  with  England 
and  the  colonies  was  given  to  British  {i.e.,  English  and  colo- 
nial) shipowners,  for  the  purpose  of  building  up  British 
shipping. 


ENGLISH    COLONIAL    THEORY    AND    POLICY  39 

37.  Effect  of  the  Navigation  Act.  In  1650  the  chief  in- 
terests of  the  colonies  were  agricultural;  ship-building,  fishing, 
and  fur-trading  being  practically  the  only  other  industries. 
Cromwell's  Navigation  Act,  which  required  the  use  of  English 
or  colonial  ships  in  the  carrying-trade,  gave  a  distinct  impetus 
to  ship-building  and  shipping.  Ship-building  soon  becamathe 
most  important  industry  in  New  England.  Indeed,  colonial 
vessels  soon  began  to  be  sold  in  England,  and  to  displace  Eng- 
lish vessels  in  the  carrying-trade;  by  1775  oneJiurd  of  the  ships 
engaged  in  British  trade  were  colonial -built.  The  only  com- 
plaints as  to  the  effects  of  these  provisions  came  from  Virginia 
tobacco  planters,  and  these  soon  died  away. 

38.  Regulation  of  colonial  commerce.  —  The  act  of  1660 
added  to  the  monopoly  of  navigation  that  of  colonial  commerce 
and  markets.  By  this  act,  all  the  colonial  commodities  which 
could  not  be  produced  at  home  were  reserved  for  the  exclusive 
use  of  English  manufacturers  and  merchants^  while  those  not 
desired  could  be  sent  to  other  countries  if  they  did  not  there 
compete  with  English  products.  In  Chapter  18  of  this  act 
are  enumerated  those  commodities  which  could  be  exported, 
on  pain  of  forfeiture,  only  to  England:  "no  sugars,  tobacco, 
cotton-wool,  indigo,  ginger,  fustick,  or  other  dyeing  woods,  of 
the  growth,  produce,  or  manufacture  of  any  English  plantations 
in  America,  Asia,  or  Africa,  shall  be  shipped  ...  to  any  place 
whatsoever,"  except  England.  This  list  was  later  considerably 
expanded  by  the  addition  of  various  other  commodities:  naval 
stores,  such  as  tar,  pitch,  turpentine,  hemp,  masts,  yards 
(1706);  rice  (1706-1730);  copper  ore;  bar  and  pig  iron,  pot  and 
pearl  ashes;  beaver  skins  (1722);  whale  fins,  hides;  molasses 
(1733). 

The  non-enumerated  commodities  could  originally  be  ex- 
ported to  any  part  of  the  world,  except  England.  They 
consisted  of  grain  of  all  kinds  (except  rice  1706-1730),  sugar 
(after  1731),  salt  pro\dsions,  fish,  and  rum.  In  1766  the  ex- 
portation of  these  articles  was  confined  to  those  nations  of 
Europe  lying  to  the  south  of  Cape  Finisterre;  as  these  were 


40        ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

not    manufacturing    countries,    England    was    less    jealous    of 
colonial  trade  with  them. 

To  this  regulation  of  exports  there  was  added  in  1663  a 
further  restriction  upon  imports  into  the  colonies.  This  law 
prohibited  by  very  high  duties  the  impaclalion  iiitxuLhe,_colQjiies 
of  any  commodities  of  the  growth,  production,  or  manufacture 
of  Europe,  unless  laden  and  shipped  ni_Gr_eat  Britain,  and  in 
English-built  and  manned  shipping.  The  only  articles  ex- 
cepted were  salt  for  the  fisheries,  wine  from  Madeira  and  the 
Azores,  and  all  sorts  of  provisions  from  Scotland  and  Ireland. 

39.  Effects  of  the  regulation  of  colonial  commerce.  —  The 
purpose  of  the  acts  was  clear:  it  was  the  desire  of  English 
merchants  and  manufacturers  to  keep  America  an  agricultural 
countr}^,  which  should  furnish  the  raw  material  for  England 
and  interfere  as  little  as  possible  in  her  trade  with  foreign 
countries.  The  interests  of  the  colonies  were  made  distinctly 
onKgoT-yipnt  to  those  of  the  mother-country.  The  actual  effects 
of  these  restrictions  upon~The  commerc'e  of  the  colonies  has, 
however,  been  greatly  exaggerated.  And,  moreover,  they 
should  be  judged  according  to  the  then  accepted  theory  of  the 
proper  method  of  dealing  with  colonies. 

Of  the  original  group  of  enumerated  commodities  one  only 
—  tobacco  —  was  a  product  of  the  American  colonies,  but 
this  was  of  sufficient  importance,  constituting  as  it  did  nearly 
one  half  of  all  the  colonial  exports,  to  condemn  or  excuse  the 
whole  principle  of  restriction.  After  1660  all  tobacco  must 
be  shipped  to  England  alone;  from  England  much  of  it,  to  be 
sure,  was  re-exported  to  foreign  countries,  but,  though  a  draw- 
back of  the  duty  was  allowed,  the  additional  freights  and 
warehouse  charges  went  into  the  pockets  of  English  middle- 
men. On  the  other  hand,  the  growing  of  tobacco  was  pro- 
hibited in  England,  and  high  duties  imposed  on  Spanish 
tobacco,  thus  guaranteeing  a  monopoly  of  the  English  market 
to  the  Virginia  tobacco  growler. 

While  the  grievance  of  the  Virginia  planters  was  not  there- 
fore so  great  as  has  usually  been  assumed,  the  enumeration  of 


ENGLISH    COLONIAL    THEORY    AND   POLICY  41 

tobacco  undoubtedly^Jfc  a  deleterious  effect  upon  its  pro- 
duction and  price. 

The  inclusion  of  rice  in  the  list  of  enumerated  commodities 
in  1706  imposed  a  real  hardship  on  the  Carolina  rice-growers 
by  depjiYing  them  of  the  Spanish  and  Portuguese  markets; 
that  this  was  regarded  as  an  injury  is  proved  by  the  relaxation 
of  the  law  in  1730  so  as  to  permit  the  direct  exportation  of  rice 
to  any  country  south  of  Cape  Finisterre.  The  restriction  of 
naval  stores,  (i.e.,  tar,  pitch,  turpentine,  hemp,  masts,  yards, 
and  bowsprits)  to  the  English  market  was  probably  more  than 
offset  by  the  granting  of  baunlieg  for  their  production.  By 
the  time  the  exportation  of  beaver  skins  was  regulated  in  1722, 
the  fur  trade  was  already  passing  from  the  American  colonies 
to  the  French  in  Canada,  but  for  a  time  the  restriction  was 
keenly  felt  by  certain  sections  of  the  colonies. 

40.  Prohibition  of  colonial  exports  to  England.  —  We  have 
thus  far  discussed  the  effect  of  the  policy  of  requiring  certain 
enumerated  articles  to  be  exported  only  to  England;  let  us 
now  inquire  as  to  the  effect  of  the  opposite  policy  of  forbidding 
other  non-enumerated  articles  to  enter  English  ports.  Such 
were  all  those  commodities  which  could  be  produced  in  Eng- 
land and  whose  importation  would  therefore  expose  the  English 
farmer  to  an  undesirable  competition.  The  products  of  the 
northern  colonies,  which  were  situated  in  the  same  climatic 
zone  as  the  mother-country,  were-  chiefly  affected  by  this 
act.  These  were  wheat,  oats,  rye,  peas,  beans,  barley,  bread, 
bacon,  beef,  pork,  fish,  butter,  cheese,  whale  oil,  and  salt  fish. 
By  the  act  of  Igfift.  and  subsequent  measures,  prohibitory 
customs  duties  were  levied  upon  the  importations  of  most  of 
these  articles  into  England,  or  they  were  absolutely  forbidden. 
Since,  however,  they  could  be  exported  to  any  other  part  of 
the  world  (after  1766  to  countries  south  of  Cape  Finisterre), 
it  would  seem  that  the  colonies  could  not  have  been  very 
adversely  affected  by  this  measure.  Nor  would  they,  had  not 
a  subsequent  act  forbidden  colonial  vessels  to  carry  back 
imports  except  from  England.    This  meant  that  a  New  England 


42        ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

vessel,  after  carrying  a  cargo  of  salt  fish  to  the  West  Indies 
or  of  lumber  to  the  Azores,  would  be  obliged  to  return  empty 
or  make  a  roundabout  trip  and  load  in  England  for  a  return 
cargo  on  the  voyage  home.  They  were  forced  to  go  to  a  foreign 
market  to  sell,  and  then  compelled  to  sail  to  England  for  their 
manufactures  and  other  imports.  The  northern  colonists  were 
thus  soon  led  either  to  evade  the  laws  altogether  or  to  develop 
manufactures  themselves  and  lessen  their  dependence  on 
England  for  such  goods.     As  a  matter  of  fact  they  did  both. 

41.  Restrictions  upon  imports.  —  While  the  regulation  of 
exports  did  not,  perhaps,  disastrously  affect  the  colonies  as  a 
whole,  at  least  before  the  middle  of  the  eighteenth  century, 
the  restrictions  upon  imports  had  a  more  serious  effect.  Those 
laws  which  prohibited  the  importation  of  foreign  goods  directly 
into  the  colonies  from  the  country  of  their  production  were 
designed  to  make  England  the  great  emporium  where  the 
products  of  all  nations  must  first  be  brought  and  unloaded. 
The  colonists  were  not  forbidden  to  import  foreign  goods;  only 
they  must  go  to  England  for  them.  While  English  merdbLants 
and  factors  were  thus  afforded  an  opportunity  of  pocketing  a 
middleman's  profit,  prices  of  such  goods  in  the  colonies  seem 
to  have  been  but  little  if  any  higher  as  a  consequence,  since 
England  was  the  natural  entrepot  for  such  trade.  Utterly 
indefensible,  however,  was  the  restriction,  by  the  imposition 
of  prohibitive  duties  in  1733,  upon  the  importation  into  the 
colonies  of  sugar,  molasses,  and  rum  from  foreign  plantations. 
Considerable  quantities  of  molasses  were  at  this  time  annually 
imported  from  the  French  West  Indies  into  New  England, 
where  it  was  distilled  into  rum  and  used  as  the  basis  of  a  profit- 
able three-cornered  trade  with  Africa.  As  the  object  of  this 
act  was  to  hamper  the  development  of  the  French  West  Indies, 
the  American  colonies  were  sacrificed,  not  to  the  supposed  best 
interests  of  English  manufacturers,  but  to  the  greed  of  British 
West  India  sugar  planters.  Even  more  disliked  in  America 
was  the  strict  enforcement  of  the  law  which  accompanied  the 
lowering  of  these  duties  in  1764.     In  fact  a  recent  writer  on 


ENGLISH    COLONIAL    THEORY    AND    POLICY  43 

the  subject  attributes  to  the  irritation  over  this  part  of  the 
Enghsh  commercial  policy  much  of  the  feeling  against  Great 
Britain  which  has  in  the  past  been  assigned  to  the  Stamp 
Act. 

42.  Restrictions  upon  intercolonial  trade.  —  There  was  still 
one  other  branch  of  commerce  which  had  remained  open  to  the 
colonies,  and  that  was  the  trade  with  one  another.  By  the 
act  of  1673,  however,  this  too  was  monopolized  by  the  English 
merchants.  A  considerable  trade  had  already  sprung  up 
between  the  colonies;  Xew  England  vessels  were  found  in  most 
of  the  southern  ports,  and  carried  on  a  profitable  commerce 
with  them  and  especially  with  the  West  Indies.  The  products 
of  the  northern  colonies  were  in  great  demand  there,  and  the 
fish  of  Xew  England,  the  flour  and  bread  of  the  middle  colonies, 
and  the  cattle,  horses,  and  especially  lumber  of  both  sections, 
found  a  ready  market  in  exchange  for  the  sugar,  molasses, 
cotton,  logwood,  indigo,  and  other  tropical  products  of  the 
West  India  islands.  With  these  goods  the  northern  colonies 
were  able  to  pay  for  the  P]nglish  manufactured  commodities 
which  they  imported;  many  New  England  ships  sailed  directly 
from  the  islands  to  Great  Britain.  Necessary  as  such  a  trade 
was  to  the  prosperity  of  the  northern  colonies,  it  introduced 
a  competition  not  relished  by  English  traders,  and  at  their 
request  heavy  duties  were  imposed  upon  the  importations  from 
one  colony  into  another.  Intercolonial  trade  was  seriously 
affected  by  this  act. 

Even  more  profitable  to  the  continental  colonies  was  the 
traffic  with  the  West  India  islands  belonging  to  France,  Spain, 
Denmark,  and  Holland,  but  direct  trade  with  these  foreign 
islands  had  been  forbidden  under  the  Navigation  Act  of  1663. 
The  inevitable  result  of  such  ill-advised  restriction  of  a  natural 
and  profitable  trade  was  the.  wholesale  evasion  of  the  law. 
The  intercourse  was  not  prevented;  it  was  simply  made  some- 
what hazardous  and  illegal.  This  constant  interference  with 
commerce  involved  real  hardship  to  the  colonies  and  secured 
no  corresponding  advantage  to  the  mother-country.     Between 


44        ECONOMIC   HISTORY    OF    THE    UNITED   STATES 

1651  and  1761  upwards  of  twenty-five  acts  of  Parliament  were 
passed  regulating  colonial  trade. 

43.  Restrictions  upon  manufacturing.  —  During  the  six- 
teenth and  seventeenth  centuries  manufactures  were  develop- 
ing in  England,  and  as  the  colonies  became  more  important 
the  English  manufacturers  demanded  not  only  protection  at 
home  against  colonial  manufactures,  but  also  the  monopoly  of 
the  colonial  market  in  which  to  dispose  of  their  own  products. 
Indeed,  the  iiLe:mntiQii.... of  .manufactures  in  the  colonies  was 
an  integral  part  of  the  mercantile  system  and  simply  sup- 
plemented the  restrictions  of  the  navigation  acts;  throughout 
this  whole  period  England  watched  most  jealously  every  sign 
of  the  development  of  manufactures  in  the  colonies.  As  early 
as  1699  the  exportation  of  wool,  j^arn,  and  woolen  cloth  from 
the  colonies  "  to  any  other  of  the  said  plantations,  or  to  any 
other  place  whatsoever,"  was  prohibited.  Household  manu- 
facturing of  woolen  yarn  and  cloth  was  not  forbidden  the 
colonial  housewives,  but  the  possible  exportation  of  these 
commodities  in  competition  with  the  growing  woolen  industry 
of  England  was  thus  early  prevented.  Manufactures  for 
domestic  purposes  continued  to  develop  in  the  northern  col- 
onies, however,  and  in  1732  the  Commission  of  Inquiry  was 
ordered  by  the  House  of  Commons  to  investigate  manufactures 
in  the  colonies.  In  the  same  year  the  exportation  of  hats  was 
forbidden.  Finally,  in  1750,  the  erection  of  any  slitting  or 
rollhig,  nulls,  or  plate,  forge,  or  steel  furnaces,  was  absolutely 
forbidden.  This  last  act  was  a  severe  blow  to  the  growing 
iron  industry  of  the  colonies,  and  coming,  as  it  did,  just  as  the 
colonies  were  developing  industrially,'''  was  a  cause  of  serious 
irritation  against  the  commercial  policy  of  England.  The 
legislation  priDMbiting  manufactures  was  the  more  irritating 
because  the  restrictive  commercial  policy  of  England,  by  shut- 
ting the  English  markets  to  the  agricultural  products  of  the 
northern  colonies  and  by  forbidding  their  exchange  in  the  West 
Indies,  had  practically  forced  the  colonies  to  supply  them- 
selves '^\dth   their   own   manufactured   commodities,  v  In   the 


ENGLISH    COLONIAL    THEORY    AND   POLICY  45 

southern  colonies,  whose  staple  products  were  not  thus  pre- 
vented from  finding  a  profitable  market,  manufactures  never 
gained  a  foothold. 

44.  Encouragement  to  industry.  —  On  the  other  hand,  it 
must  be  remembered  that  along  with  the  policy  of  restriction 
there  went  also  the  policy  of  encouragement.  While  manu- 
factures were  stifled,  the  production  of  raw  materials  was 
favored  by  an  extensiv^ystem  of  bounties/lrom  1705  on, 
especially  on  indigo,  hemp,  flax,  timber,  naval  stores  (tar, 
pitch,  turpentine,  and  rosin),  and  pipe,  hogshead,  and  barrel 
staves.  One  estimate  makes  the  amount  paid  in  bounties  to 
the  colonies  more  than  a  million  and  a  half  pounds.  So,  too, 
the  production  and  exportation  of  pig  and  bar  iron  was  en- 
couraged by  admitting  them  into  England  free  of  duty,  while 
Swedish  iron  was  held  off  by  a  heavy  .tariff.  As  wood  was 
used  for  smelting  at  that  time,  and  not  coal,  the  production 
of  iron  was  more  closely  allied  to  agriculture  than  to  manu- 
factures. Other  articles,  as  tobacco,  raw  silk,  pot  and  pearl 
ashes,  lumber,  iron,  whale-fins  and  train  oil,  etc.,  were  at 
different  times  admitted  to  England  either  free  of  duty, 
or  at  rates  much  lower  than  similar  articles  from  other 
countries. 

In  general,  therefore,  the  commercial  policy  of  England  was 
designed  to  keep  the  colonies  in  the  state  of  agricultural 
communities,  which  should  supply  raw  materials  to  Eng- 
lish manufacturers  and  furnish  a  market  for  their  finished 
products. 

45.  Evasion  of  restrictions.  —  The  situation  in  the  colonies 
and  the  silent  acquiescence  of  the  colonists  in  this  policy  cannot 
be  fully  understood  unless  we  realize  to  how  great  an  extent 
the  provisions  were  evaded.  In  the  first  place,  the  laws  were 
allowed  to  become  dead  letters  or  were  not  strictly  enforced 
by  English  officials.  Except  for  the  short  period  from  1696 
to  1721,  when  there  was  comparatively  strict  execution  of  the 
laws,  the  policy  of  "  saljotarj^^jieglect  "  of  the  colonies  was 
adhered  to  by  Parliament.     Indeed,  there  was  often  connivance 


46        ECONOMIC   HISTORY    OF    THE    UNITED    STATES 

of  the  customs  officers  in  the  evasion  of  tlie  laws.  In  the 
South  there  was  some  ilUcit  trade  with  the  West  Indies,  while 
considerable  went  to  other  countries  than  England.  Most  of 
the  smuggling  occurred  in  New  England  and  the  middle  colonies, 
where  large  quantities  of  wines,  brandies,  and  other  European 
goods,  together  with  tea,  coffee,  spices,  etc.,  from  the  East 
Indies,  were  smuggled  into  the  larger  cities.  But  the  most 
extensive  illicit  trade  was  carried  on  with  the  West  Indies.  In 
1700  one  third  of  the  trade  at  Boston  and  New  York  was  said 
to  be  in  violation  of  the  law.  It  must  be  remembered,  how- 
ever, that  such  contraband  trade  was  regarded  in  the  colonies 
as  perfectly  justifiable  in  view  of  the  restrictive  commercial 
legislation,  and  that  some  of  the  most  reputable  men  were 
engaged  in  it.^  On  the  coasts  of  England  itself,  it  is  estimated 
that  there  were  at  this  time  about  forty  thousand  smugglers. 
Certain  it  is  that  the  general  practice  of  smuggling  and  the 
evasion  of  the  laws  made  the  restrictive  legislation  of  England 
bear  less  heavily  upon  the  colonists  than  it  otherwise  would 
have  done.  Indeed,  had  it  not  been  for  the  profits  from  this 
illicit  trade,  the  colonies  would  never  have  been  able  to  pay 
for  the  enormous  amount  of  British  manufactures  and  Euro- 
pean commodities  annually  imported  from  England;  this 
amounted  to  between  £350,000  and  £400,000  a  year,  and  was 
paid  for  only  in  part  by  the  colonial  products  exported  directly 
to  England.  Lord  Sheffield  estimated  that  by  means  of  this 
indirect  and  illicit  trade  the  colonies  must  have  remitted  to 
England,  between  the  years  1700  and  1773,  upwards  of 
£30,000,000. 

'According  to  D.  A.  Wells,  "The  colonists  were  a  nation  of  law- 
breakers: nine  tenths  of  the  colonial  merchants  were  smugglers.  One 
quarter  of  the  whole  number  of  the  signers  of  the  Declaration  of  Indepen- 
dence were  bred  to  the  contraband  trade.  John  Hancock  was  the  prince 
of  contral)and  traders,  and,  with  John  Adams  as  his  counsel,  was  on  trial 
before  the  Admiralty  Court  in  Boston  at  the  exact  hour  of  the  shedding 
of  blood  at  Lexington,  to  answer  for  half  a  miUion  dollars'  penalties 
alleged  to  have  been  by  him  incurred  as  a  smuggler."  [Lalor's  Cyclopedia 
of  Political  Science,  I,  75.] 


ENGLISH    COLONIAL    THEORY    AND    POLICY  47 


SUGGESTIVE  TOPICS   AND  QUESTIONS.     CHAPTER  III 

1.  When  and  by  whom  was  the  Mercantile  System  given  expression? 
[Ingram^  Hist,  of  Pol.  Econ.,  34-56;  Rabbeno,  chaps.  1,  2,  3;  Schmoller, 
The  Mercantile  System;  encyclopedias.] 

2.  What  was  the  history  of  the  Dutch  East  India  Company?  [Day, 
The  Dutch  in  Java,  chaps.  2,  3;  encyclopedias.] 

3.  The  history  of  the  English  East  India  Company?  [Warner, 
Landmarks  of  Engl.  Ind.  Hist.,  202;  Beckles  Willson,  Ledger  and  Sword; 
encyclopedias.] 

4.  Does  any  modern  system  of  governmental  regulation  of  industry 
remind  you  of  mercantihsm?     How? 

5.  Was  the  English  colonial  system  a  benefit  or  an  injury  to  the 
colonies?  [Ashley,  in  Quart.  Journ.  of  Econ.,  XIV,  1-29;  A.  Smith, 
Wealth  of  Nations,  book  IV,  chap.  7,  part  2;  Beer,  The  Commercial 
Policy  of  England;  Raljbeno,  chap.  3;  Wilson,  Hist,  of  the  Amer.  People, 
II.] 

6.  Was  the  Engli.sh  colonial  system  advantageous  to  England?  [As 
above;  Rabbeno,  37-47;  Ricardo,  Princ.  of  Pol.  Econ.  and  Taxation, 
chap.  25.] 

7.  Why  did  England  endeavor  to  stimulate  the  production  of  naval 
stores  in  the  colonies?  [Lord,  Industrial  Experiments  in  the  British 
Colonies  of  No.  Amer.,  56.] 

8.  What  was  the  bounty  system  as  applied  to  the  colonies?  Are 
they  granted  in  the  United  States  to-day?  What  are  the  advantages  or 
disadvantages  of  the  system?  [Lord,  Industrial  Experiments,  part  2; 
Hamilton,  Report  on  Manufactures  in  Taussig's  State  Papers  and  Speeches 
on  the  Tariff,  79-103;  also  in  Annals  of  Cong.,  1791-1793,  971-1034,  and 
in  Works.] 

9.  Was  Grenville's  contention  that  the  colonists  should  pay 
a  portion  of  the  expense  incurred  in  their  defense  just?  [Trevelyan, 
Hist,  of  Amer.  Rev.,  I;  Coman,  96;  Howard,  Prehminaries  of  the  Rev., 
chap.  6.] 

10.  In  what  respects  did  the  American  Association  resemble  the 
Consumers'  League  of  to-day?  [Bishop,  I,  365-383;  Coman,  94;  Bliss, 
Encycl.  of  Soc.  Ref.,  art.  Consumers'  League.] 

11.  Why  were  there  so  many  smugglers  in  England  at  this  time? 
AVhat  did  they  smuggle?     [Beer,  131.] 

12.  Did  the  price  of  tobacco  rise  or  fall  during  the  colonial  period? 
Were  the  price  fluctuations  caused  by  the  "enumeration"  of  tobacco? 
[Beer,  50;  Ashley,  in  Quart.  Journ.  Econ.,  XIV,  11.] 

13.  What  was  the  "three-cornered"  trade  with  Africa?  [Weeden, 
II,  chap.  12;  Abbot,  chap.  3;  Coman,  76-77.] 


48        ECONOMIC    HISTORY    OF    THE    UNITED   STATES 


SELECTED   REFERENCES.     CHAPTER  III 

**Ashley :  Commercial  Legislation  of  England  and  the  American  Colonies, 
in  Quarterly  Journal  of  Economics,  XIV,  1-29;  same  article 
in  Surveys,  Historic  and  Economic,  309-335. 

**Beer:  Commercial  Policy  of  England  toward  the  American  Colonies, 
chaps.  4-8. 

*Rab])eno:  American  Commercial  Policy,  48-9L 

*Schmoller   The  Mercantile  System,  43-80. 

**Smith,  A.:  WeaUh  of  Nations,  book  IV,  chaps.  1,  2,  7. 

*Warner:  Landmarks  of  English  Industrial  History,  chaps.  9,  14. 

Cunningham:  Growth  of  English  Industry  and  Commerce,  II,  256-292. 

Hewins:  English  Trade  and  Finance,  chaps.  3,  5. 

Howard:  Preliminaries  of  the  Revolution. 

Lord:  Industrial  Experiments  in  the  British  Colonies  of  North  America. 

Merivale:  Colonization  and  Colonies,  Lecture  4. 

Seeley:  Expansion  of  England,  chaps.  2-6. 


I.! 


CHAPTER   IV 
COLONIAL   INDUSTRIES 

46.  Industries  in  the  colonies.  —  The  economic  Hfe  of  the 
colonies  was  extremely  simple,  the  main  energies  of  the  people 
being  directed  to  the  extractive  industries.  In  addition  to 
agriculture,  which  naturally  in  a  new  country  claimed  the  first 
attention  of  the  colonists,  other  industries  soon  sprang  up  as 
needs  and  opportunities  directed.  In  New  England,  where 
agriculture  by  reason  of  the  unfertile  soil  was  least  profitable, 
the  chief  occupations  were  lumbering,  ship-building,  trading, 
and  fishing.  The  people  of  the  middle  States  engaged  in  the 
fur  trade,  and,  as  did  those  of  New  England,  in  the  manufac- 
ture of  a  wide  range  of  household  supplies;  carpentry,  black- 
smithing,  and  tanning  were  generally  carried  on  in  every 
community,  while  the  spinning-wheel,  the  loom,  and  the 
hand  card  were  to  be  found  in  almost  every  house.  In  the 
South,  on  the  contrary,  there  were  few  industries  outside  the 
plantations  of  sugar,  tobacco,  rice,  and  indigo;  some  naval 
stores  were  produced,  chiefly  in  North  Carolina,  but  the  varied 
household  manufactures  of  the  North  were  entirely  lacking, 
even  the  most  necessary  supplies  being  procured  from  the 
northern  colonies  or  from  England. 

47.  Lumbering.  —  From  the  very  beginning  the  efforts  of 
the  colonists  were  directed  to  the  utilization  of  the  almost 
exhaustless  resources  of  the  forests  which  surrounded  them. 
Although  in  the  southern  colonies  the  magnificent  forests  were 
regarded  rather  as  an  encumbrance  and  recklessly  cleared  off 
to  make  room  for  the  all-consuming  tobacco,  in  the  North  they 
were  early  utilized  as  a  cheap  and  quick  export.  Even  by 
hand  a  man  could  make  15,000  clapboards  or  pipe-staves  in  a 

5  49 


50        ECONOMIC   HISTORY    OF    THE    UNITED   STATES 

year,  which,  according  to  Wright,  were  worth  in  the  colonies 
£4  per  thousand,  and  in  the  Canaries  £20.  Owing  to  the 
scarcity  of  labor,  however,  it  was  exceedingly  desirable  to  have 
machinery  to  do  the  work.  Artisans  were  sent  as  early  as 
1620  to  Virginia  to  set  up  a  sawmill,  but  none  seems  to  have 
been  erected  until  1652,  when  one  was  built  at  a  cost  of  forty- 
eight  beaver  skins.  The  first  mill  in  the  colonies  is  stated  by 
Bishop  to  have  existed  in  Dorchester,  New  England,  as  early 
as  1628,  which  was  thirty-five  years  before  they  were  intro- 
duced into  England.  The  Dutch  built  many  mills  along  the 
Hudson  to  run  by  wind  or  water.  The  New  Hampshire  and 
Maine  settlements  were  at  first  composed  almost  entirely  of 
timber  cutters,  and  here  there  was  a  sawmill  as  early  as  1635. 
The  lumber  exported  consisted  chiefly  of  staves  and  heading, 
shingles,  hoops,  boards,  and  timber  of  various  sorts  for  masts, 
spars,  and  buildings.  Owing  to  the  rapid  destruction  of  her 
own  forests  in  the  iron  industry,  England  endeavored  to  secure 
for  herself  the  colonial  supply  of  timber  and  placed  it  upon  the 
list  of  ''  enumerated  "  articles,  while  early  in  the  eighteenth 
century  she  provided  for  its  importation  free  of  dut}'.  Trees 
suitable  for  masts  were  marked  with  a  broad  arrow  and  re- 
served for  the  use  of  the  royal  navy,  under  a  penalty  of  £100 
for  their  alienation  to  other  purposes.  In  spite  of  these  acts 
most  of  the  lumber  exported  went  to  the  West  Indies,  and  to 
Spain  and  Portugal.  In  1770  the  value  of  the  lumber  exported 
from  the  colonies  was  about  $775,000. 

48.  Naval  stores.  —  Closely  allied  to  lumbering  was  the 
production  of  naval  stores,  which  Parliament  made  vigorous 
efforts  to  develop  during  the  eighteenth  century.  England  had 
imported  these  articles  principally  from  vSweden,  and  when 
at  the  beginning  of  this  period  the  Swedish  company  which 
controlled  their  supply  attempted  to  raise  the  price.  Parliament 
turned  for  relief  to  the  North  American  colonies.  In  1706  a 
bounty  of  £4  per  ton  was  given  on  the  importation  of  tar  and 
pitch,  £3  per  ton  on  rosin  and  turpentine,  £6  upon  water- 
rotted  hemp,  and  upon  all  masts,  yards,  and  bowsprits  £1  per 


COLONIAL    INDUSTRIES 


51 


ion  of  40  feet.  Except  in  North  Carolina  this  policy  was  not 
very  successful  in  stimulating  the  production  of  these  articles. 
In  1770  the  quantity  of  tar  exported  was  82,005  barrels;  of 
pitch,  9,114;  and  of  turpentine,  17,014  barrels,  worth  in  all 
about  $175,000. 

In  addition  to  the  naval  stores,  pot  and  pearl  ashes,  oak 
bark,  and  some  other  products  of  the  forest  were  produced  in 
considerable  quantities  for  exportation  to  England,  where  they 
were  used  in  the  manufactures  of  that  country;  their  value  in 
1770  was  estimated  at  $290,000. 


Colonial  Ship  Building 
Sea-going  vessels  began  to  be  built  in  New  England  after  1630,  and 
were  soon  sufficient  for  home  needs.     Planks  of  oak  and  tall,  straight 
nnasts  of  fir  could  be  had  almost  at  the  water's  edge,  while  every- 
where was  pitch  pine  for  the  making  of  tar  and  turpentine.     The 
colonists  soon  l^ecame  excellent  shipwrights. 

« 

49.  Ship-building.  —  One  of  the  most  important  industries 
in  the  colonies,  particularly  in  New  England,  was  ship-building. 
The  industry  was  begun  within  three  years  after  the  establish- 
ment of  Plymouth  Colony,  and  by  1631  had  already  grow^n  to 
such  proportions  as  to  require  official  regulation.  In  1676 
Massachusetts  had  a  total  of  730  vessels.     Owing  to  the  large 


52        ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

supplies  of  splendid  timber  at  the  water's  very  edge,  cheaper 
and  better  vessels  could  be  built  in  the  American  colonies  than 
anywhere  in  Europe.  Toward  the  end  of  this  period  an  oak 
vessel  could  be  built  in  Massachusetts  for  $24  a  ton,  while 
neither  in  England  nor  on  the  continent  could  a  similar  vessel 
be  built  for  less  than  $50  a  ton.  American  ships  soon  began 
not  merely  to  carry  on  a  vigorous  trade  at  home,  but  to  crowd 
out  English  shipping  in  the  home  ports.  About  fifty  New 
England  built  vessels  were  annually  sold  abroad,  and  by 
1775  about  398,000  tons  or  nearly  one  third  of  the  tonnage 
afloat  under  the  British  flag  had  been  built  in  American  dock- 
yards. 

The  ship-builders  on  the  Thames  more  than  once  complained 
to  Parliament  of  the  effect  of  American  competition  upon 
their  industry,  but  it  must  be  noted  that  in  this  instance  the 
Board  of  Trade  placed  no  restriction  upon  the  colonial  industry. 
Indeed  the  effect  of  the  navigation  acts,  which  restricted  all 
trade  to  English  and  colonial  built  shipping,  greatly  stimulated 
ship-building  in  the  colonies.  A  contemporary  account  placed 
the  number  of  American  ships  at  2000,  and  of  seamen  at  33,000, 
in  1775.  The  proportion  of  the  vessels  engaged  in  foreign 
trade  owned  at  home  differed  greatly  in  the  various  colonies: 
in  New  England  three  fourths  of  such  vessels  were  owned  by 
men  living  in  that  section,  while  in  the  South  only  one  fourth 
was  so  owned. 

50.  Fishing.  —  For  years  before  the  first  English  settlement 
in  North  America  English  fishermen  had  frequented  the  New 
England  coast  and  established  summer  fishing  stations,  in 
some  years  employing  as  many  as  two  hundred  vessels  and  ten 
thousand  men  and  boys  in  the  Newfoundland  fisheries.  To 
the  settlers  at  Plymouth  John  Smith  gave  some  blunt  but 
sensible  advice,  "the  staple  from  hence^to  produce  is  fish,'* 
and  it  was  in  the  fisheries  in  truth  that  New  England  gained 
her  greatest  wealth.  The  industry  was  developed  early  and 
throughout  the  whole  of  the  colonial  period  remained  a  lucra- 
tive  one.     The  cod  fishery  began  about*  1670,  and  developed  so 


COLONIAL    INDUSTRIES  53 

rapidly  that  within  five  years  665  vessels  were  employed  in 
this  industry,  which  required  the  services  of  over  four  thousand 
seamen.  About  1700  the  whale  fishery  was  begun  and  prose- 
cuted with  such  success  that  by  1721  two  hundred  and  sixty 
vessels  were  employed.  Within  fifty  years  the  whales  deserted 
the  American  coast,  but  were  followed  to  the  Arctic  and  Ant- 
arctic Oceans  by  the  whalers.  In  1771  this  business  employed 
304  vessels,  with  4059  seamen. 

The  fishing  industry  was  confined  exclusively  to  New 
England,  and  was  estimated  to  bring  in  about  £255,000  a  year; 
during  the  colonial  period  not  a  vessel  engaged  in  either  the 
cod  or  whale  fisheries  was  owned  south  of  Connecticut.  For 
that  section  it  possessed  great  economic  significance.  The 
development  of  the  cod  and  mackerel  fisheries  provided  New 
England  with  a  needed  staple  for  foreign  trade;  they  made  the 
inhabitants  a  commercial  and  sea-going  people,  giving  them  a 
wider -outlook  and  breaking  down  the  isolation  of  a  purely 
agricultural  community;  whale  fishing  brought  in  larger  ves- 
sels and  the  practice  of  making  longer  voyages.  The  training 
which  New  England  seamen  received  in  the  fisheries  made 
them  the  best  and  most  daring  sailors  in  the  world. 

51.  Colonial  commerce.  —  Although  the  commerce  and 
trade  of  the  colonies  kept  expanding,  by  the  end  of  the  colonial 
period  the  total  exports  from  all  the  colonies  amounted  to  only 
$20,000,000.  But  so  insignificant  was  the  world's  trade  at 
that  time  that  this  comprised  one  seventh  of  the  total 
commerce  of  England,  and  was  considered  sufficiently  impor- 
tant for  England  to  reserve  it  to  herself.  The  importance  of 
foreign  commerce  differed  greatly  in  the  different  colonies. 
The  absence  of  a  staple  agricultural  export  and  the  profitable- 
ness of  the  fisheries  and  of  ship-building  early  made  New  Eng- 
landers  the  leading  carriers  of  colonial  commerce.'  On  the 
other  hand,  while  the  tobacco  trade  of  the  southern  colonies 
gave  employment  to  some  4000  seamen,  few  of  them  lived  in 
that  section.  Until  about  1750  Boston  was  the  most  impor- 
tant seaport,  sending  out  five  or  six  hundred  vessels  annually 


54         ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

in  the  foreign  trade  alone.  Newport  ranked  second,  and  New 
York  third,  with  only  about  half  as  many  ships  as  Boston. 
About  the  middle  of  the  eighteenth  century,  Philadelphia 
secured  the  leading  place  as  the  chief  port  of  North  America, 
with  an  export  trade  of  over  $3,500,000  a  year,  and  a  total 
foreign  commerce  of  over  $5,000,000.  Her  situation  made  her 
the  principal  market  for  the  meat  and  flour  of  the  interior 
country. 

52.  Fur  trading.  —  As  wild  animals  abounded  in  the  pri- 
meval forests  of  North  America,  trade  in  their  valuable  furs 
and  skins  was  early  developed,  and  throughout  the  colonial 
period  remained  an  important  frontier  industry.  The  earliest 
English  colonists  traded  for  furs  with  the  Indians  in  New  Eng- 
land, but  New  York  soon  became  the  most  important  center 
of  this  trade  because  of  its  advantageous  situation  at  the 
mouth  of  the  Hudson  River.  The  fur  trade  in  New  Nether- 
lands was  a  monopoly  of  the  Dutch  West  India  Company,  and 
so  lucrative  was  the  business  that  their  first  shipment  of  furs  is 
reported  to  have  brought  in  a  profit  of  over  $10,000;  in  eight 
years  the  annual  return  had  amounted  to  $56,000.  So  profit- 
able a  business  aroused  keen  competition  and  the  fur  traders 
pushed  up  the  Hudson  River  to  the  Great  Lakes,  where  they 
established  a  station  at  Oswego  to  intercept  the  Indians  on 
their  way  down  the  St.  Lawrence  to  Montreal;  out  along  the 
valley  of  the  Mohawk  to  the  Illinois  country,  and  across  the 
Alleghanies  to  the  Ohio  River.  There  they  came  into  conflict 
wdth  the  French,  and  the  competition  over  the  fur  trade  was 
one  of  the  chief  immediate  causes  of  the  French  and  Indian 
War. 

The  fur  trade  possessed  great  economic  importance  in  the 
early  history  of  this  country,  because  it  furnished  a  ready, 
cheap,  and  yet  valuable  article  of  export  for  the  northern 
colonies.  But  more  than  this,  it  furnished  the  initial  incen- 
tive to  westw^ard  exploration  and  settlement.  As  population 
became  more  dense  and  game  more  scarce  the  fur  traders 
followed    the   retreating   supply   across   the   Alleghanies    and 


COLONIAL    LMDUSTRIES  55 

further  west.  The  trading  posts  were  soon  taken  up  by  the 
settler  and  the  frontier  was  pushed  ever  further  from  the 
coast.  In  order  to  secure  the  diminishing  supply  for  her  own 
use,  England  in  1764  placed  hides  and  skins  on  the  list  of 
enumerated  articles.  In  1770  the  exports  of  furs  and  peltry 
from  all  the  North  American  colonies,  which  included  Canada, 
was  about  $670,000. 

53.  Household  industries.  —  During  the  seventeenth  and 
eighteenth  centuries  the  domestic  system  of  industry  prevailed 
in  England,  under  which  handicrafts  were  carried  on  by  work- 
men in  their  own  homes.  Many  of  the  immigrants  to  America 
during  this  period  had  been  artizans  at  home  and  brought 
with  them  to  the  New  World  considerable  knowledge  and 
skill  in  the  mechanic  arts.  Furthermore,  the  sparse  and  scat- 
tered population  made  it  necessary  for  the  colonists  to  provide 
many  things  for  themselves,  for  they  were  too  civilized  to  re- 
vert to  the  rude  Indian  mode  of  life.  In  all  the  northern  and 
middle  colonies  accordingly  household  industries  flourished, 
and  many  of  the  farms  and  plantations  were  nearly  self-sus- 
taining economic  units.  Such  necessary  industries  as  soap 
and  candle  making,  dressing  and  making  up  leather,  car- 
pentry, blacksmithing,  spinning,  weaving,  the  making  of 
clothes  and  hats,  and  many  other  industries,  were  carried  on 
within  the  home. 

54.  Attempts  at  manufacturing.  —  Of  manufacturing  proper, 
that  is  the  production  of  goods  outside  the  home  for  sale  in  the 
market  or  for  export,  there  was  comparatively  little  during  the 
colonial  period.  Even  Bishop,  the  diligent  historian  of  Ameri- 
can manufactures,  admits  that  the  history  of  the  efforts  made 
during  the  first  one  hundred  years  to  introduce  the  manu- 
facturing arts  into  the  American  colonies  is  "  little  more  than 
a  record  of  unsuccessful  enterprise."  Yet,  even  from  the  first, 
experiments  were  made  in  manufactures  and  several  of  the 
colonial  governments  gave  special  encouragement  to  such 
enterprises  by  bounties  and  other  legislation.  When  iron 
came  from  Spain,  leather  from  France  or  Germany,  cloth  from 


56 


ECONOMIC    HISTORY    OF    THE    UNITED    STATES 


England,  it  was  thought  that  it  would  be  more  economical 
to  produce  these  things  at  home.  The  first  efforts  of  the  Vir- 
ginia colony  were  devoted  in  1608  to  the  manufacture  of  pitch, 
tar,  soap-ashes,   and   clapboards.     But    this  was    done  under 

the  direction  of  the  council  in 
London;  Captain  John  Smith 
saw  better  the  needs  of  the 
situation,  and  begged  them 
to  send  over  "  husbandmen, 
gardeners,  fishermen,  black- 
smiths, masons,  and  diggers 
up  of  trees'  roots."  These 
early  experiments  were  mainly 
abortive,  for  the  colonists  soon 
found  that  they  could  more 
profitably  devote  themselves 
to  other  pursuits.  The  scar- 
city of  labor,  the  lack  of  capi- 
tal, and  the  hard  conditions 
of  pioneer  life  prevented  the 
earlier  colonists  from  engag- 
ing in  the  manufacture  of 
Spinning  Wheel  products     other     than    those 

On  the  spinning  wheel  the  carded  which  were  absolutely  neces- 
wool  or  prepared  flax  was  drawn  out  r,      ,i  r^-i        tdj. 

into  long,  even  yarn  or  thread.     The  ^^''Y-      ^^uth     of    the     Poto- 

spun  yarn  was  later  woven  into  cloth,  mac,  indeed,  even  the  neces- 
So    important    a    part  did    spinning  •  r    it  •  ^    j 

play   ii   the   home    life   of   colonial  ^^Ties   of   life   were  imported 

women,   that   an   unmarried  woman  from     Great     Britain;    manu- 

was  known  as  a  "spinster"  from  her  r     j      ■  j        i        j 

chief  occupation.  facturmg  was   developed,   so 

far   as    it   was   developed   at 
all,  entirely  in  New  England  and  the  middle  Colonies. 

55.  Textile  manufactures.  —  The  spinning  and  weaving  of 
coarse  "  homespun  "  woolen  and  linen  cloth  for  domestic  use 
was  carried  on  within  the  family  from  the  earliest  period 
of  colonial  history.  Later,  especially  with  the  coming  of 
immigrants  skilled  in  the  textile  industries,  the  manufacture 


COLONIAL    INDUSTRIES  57 

was  more  developed,  and  fulling  mills  were  built.  The  investi- 
gation made  by  the  Board  of  Trade  and  Plantations  in  1731, 
"  with  respect  to  laws  made,  manufactures  set  up,  or  trade 
carried  on  in  the  colonies,  detrimental  to  the  trade,  navigation, 
or  manufactures  of  Great  Britain,"  showed  that  the  northern 
colonies  already  produced  most  of  the  cloth  they  consumed. 
Taking  them  altogether,  the  colonists  probably  made  about 
three  fourths  of  the  textile  goods  for  domestic  use,  but  these 
were  almost  exclusively  of  the  coarser  grades.  The  finer 
qualities  of  linens  and  other  goods  continued  to  be  imported 
from  England  and  Ireland  throughout  this  period. 

56.  Iron  manufactures.  —  Iron  was  found  in  all  the  colonies 
in  considerable  abundance,  in  the  form  of  bog  iron  ore,  and 
its  ease  of  mining  and  working,  together  with  the  abundance 
of  fuel  and  water-power,  led  to  an  early  development  of  the 
iron  industry.  Raw  iron,  agricultural  implements,  household 
utensils,  tools,  and  firearms  were  produced  in  growing  quanti- 
ties, most  of  the  iron  wares  being  manufactured  in  the  northern 
colonies,  while  raw  iron  was  mined  in  the  South  and  exported 
thence  to  England.  The  reports  of  the  governors  of  various 
provinces  in  1731  showed  some  six  furnaces  and  nineteen 
forges,  all  in  New  England,  but  this  was  undoubtedly  an  under- 
statement; they  produced  ''not  one  fourth  part  enough  to 
serve  their  own  use."  Twenty  years  later  the  colonies  reported 
four  slitting  and  rolling  mills,  ten  forges,  and  five  steel  furnaces. 

The  development  of  the  industry  in  the  colonies  led  Par- 
liament to  prohibit,  in  1750,  the  erection  of  any  slitting  or 
rolling  mill,  plating  forge,  or  steel  furnace,  under  a  penalty  of 
£200,  in  order  to  protect  the  home  manufacturers.  This 
act  was  one  of  the  most  injurious  of  the  commercial  restric- 
tions upon  colonial  industry.  At  the  same  time  the  act  pro- 
vided for  the  development  of  the  production  of  pig  and  bar 
iron  by  admitting  it  into  the  port  of  London  free  of  duty  (in 
1757  this  was  extended  to  any  port  in  England).  England 
was  at  this  time  importing  some  20,000  tons  of  Swedish  and 
foreign  iron,  and  hoped  by  this  act  to  secure  her  raw  material 


58        ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

from  the  colonies  and  at  the  same  time  to  stifle  the  growing 
manufactures  there.  The  exports  of  pig  iron  grew  slowly, 
under  the  stimulus  thus  given,  from  about  two  thousand  tons 
in  1745  to  over  seven  thousand  tons  in  1771. 

57.    Other    manufactures.  —  Various     other     manufactures 
existed  in  the  colonies  at  an  early  period  and  were  gradually 


The  Hand  Loom 
The  weaving  of  the  spun  yarn  is  done  on  the  loom. 
The  two  frames  suspended  from  the  top  of  the 
loom  held  the  warp,  the  threads  of  which  ran 
lengthwise  of  the  piece  of  goods;  these  were  moved 
backward  and  forward  l)y  the  pedals  below,  which 
were  operated  by  the  feet  of  the  weaver.  The 
woof  threads  were  woven  into  the  warp  by  means 
of  shuttles,  which  were  thrown  by  hand  l)ack  and 
forth  l)etween  the  woof  threads.  The  power  loom 
of  to-day  is  constructed  on  the  same  principles,  but 
is  nearly  automatic  in  operation. 

developed  to  meet  the  growing  wants  of  the  people.  Most  of 
these,  however,  were  for  local  consumptio.n,  and  on  a  small 
scale.  Such  were  corn  and  grist  mills;  leather  goods  of  all 
descriptions,  as  boots,  shoes,  breeches,  gloves,  harness,  and 
saddlery;  furniture,  cabinet  wares;  wagons,  carriages,  carts; 
cooper's  wares,  brass  or  copper  wares,  tinwares;  bricks,  tiles, 
and  potteries;  cordage,  twine,  and  sail  cloth;  paper;  spirituous 


COLONIAL    INDUSTRIES  59 

and  malt  liquors;  salt ;  and  beaver  hats.  Some  of  these  articles 
were  produced  in  sufficient  quantities  to  allow  of  export  to  the 
other  colonies,  the  West  Indies,  or  even  to  England.  Thus 
the  Board  of  Trade  and  Plantations  reported  in  1731  that  about 
10,000  beaver  hats  were  made  annually  in  New  England  and 
New  York;  in  the  same  year,  in  response  to  a  petition  of  the 
London  hatters,  the  exportation  of  hats  from  the  colonies  was 
prohibited  and  their  further  manufacture  limited.  The  dis- 
tillation of  rum  from  West  Indian  molasses  was  an  important 
New  England  industry,  employing  at  one  time  over  twenty 
distilleries  in  Newport  alone;  this  was  penalized  by  heavy 
duties  by  act  of  Parliament  in  1733.  Of  the  other  industries 
the  most  important  were  the  manufacture  of  bricks  and  tiles, 
leather  goods,  cordage  and  sail-cloth,  and  printing  and  paper 
making. 

58.  Colonial  bounties  and  tariffs.  —  In  accordance  with  the 
prevailing  mercantilist  doctrines  the  colonial  governments,  as 
w^ell  as  that  of  Great  Britain,  thought  it  necessary  to  regulate 
trade  and  industry  by  legislation,  and  consequently  practically 
every  one  of  the  colonies  passed  laws  providing  for  bounties  or 
duties.  As  the  production  of  domestic  cloth  was  especially 
desired,  seven  of  the  colonies  offered  bounties  to  stimulate  the 
growth  of  wool  and  linen  and  their  manufacture  into  cloth. 
Massachusetts,  for  instance,  in  1640,  ordered  a  general  bounty 
of  25  per  cent,  on  cloth  production  "  for  the  incuragement  of 
the  manifocture,"  but  repealed  it  three  years  later  on  account 
of  the  heavy  drain  on  the  treasury.  Bounties  were  also  offered 
for  the  production  of  silk,  paper,  iron,  and  firearms,  by  the 
various  colonial  governments;  and  of  vines,  indigo,  cochineal, 
silk,  and  hemp  by  the  London  Society  of  Arts  and  Manufactures. 
On  the  other  hand,  import  or  export  duties  were  imposed  by 
the  colonial  legislatures  in  nearly  every  colony  in  addition  to 
those  levied  by  England.  These  were  sometimes  for  revenue 
purposes  simply;  sometimes  for  sumptuary,  retaliatory,  or  pro- 
tective purposes.  No  consistent  or  permanent  policy  was  fol- 
lowed  in  these  tariffs,  and  they  were  as  frequently  directed 


60        ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

against  neighboring  colonies  as  against  foreign  nations.  Pro- 
fessor Wm.  Hill  classifies  the  main  tariff  duties  under  four 
heads:  (1)  tonnage  duties  or  taxes  on  shipping;  (2)  export 
duties  on  tobacco;  (3)  import  duties  on  slaves;  (4)  regular 
tariff  schedules,  in  which  wines  and  liquors  were  the  most 
important  items. 

SUGGESTIVE  TOPICS  AND  QUESTIONS.     CHAPTER  IV 

1.  Why  did  England  desire  to  promote  the  culture  of  silk-  in  the 
colonies?  [Smith,  Wealth  of  Nations,  book  IV,  chap.  2;  Schmoller,  The 
Mercantile  System,  83  ff .] 

2.  Is  raw  silk  produced  in  the  United  States  to-day?  Where  does  it 
come  from?     Why?     [Adams,  Com.  Geog.,  101.] 

3.  Are  the  fisheries  off  the  Newfoundland  banks  open  to  all  nations 
alike?  Has  it  always  been  so?  [McMaster,  IV,  457-469;  E.  Schuyler, 
Amer.  Diplomacy  and  Commerce,  chap.  8;  Henderson,  Amer.  Dipl.  Ques- 
tions, 471-500;  Abbot,  chap.  9;  Marvin,  chap.  13.] 

4.  Description  of  the  lumber  industry  in  the  colonies.  Has  it  pro- 
gressed since?  [Defebaugh,  Hist,  of  Lumber  Ind.  of  Amer.,  chaps.  26,  30; 
Wright,  Ind.  Evol.,  chap.  6.] 

5.  Describe  the  character  and  size  of  colonial  vessels;  the  extent  of 
their  voyages  and  the  kind  of  cargoes.     [Marvin;  Abbot;  Coman,  77.] 

6.  Description  of  whale  fishing.  [Abl)ot,  chap.  4;  Marvin,  chap.  8; 
Weeden,  I,  chap.  11;  Pitkin,  Stat.  View  of  U.  S.,  43-47.] 

7.  How  far  west  did  the  fur  traders  push?  What  kinds  of  furs  did 
they  get?     [Crittenden,  The  Amer.  Fur  Trade  of  the  Far  West.] 

8.  History  of  the  Hudson  Bay  Company.  [Encycl.;  Johnson,  Great 
Events,  XVIII,  258-274.] 

9.  What  is  the  etymological  meaning  of  "manufacture"?  Is  the 
original  or  the  modern  meaning  more  applicable  to  colonial  manufactures? 
[Century  Diet.] 

10.  How  large  were  the  early  manufacturing  enterprises  in  the  colo- 
nies? Why  was  so  much  pains  taken  to  develop  them?  [Bishop,  I,  index 
"manufactures."] 

11.  What  effect  did  the  enumeration  by  Great  Britain  of  New  Eng- 
land's agricultural  products  have  upon  the  development  of  manufactures 
and  commerce  in  that  section?     [Beer,  389;  Weeden,  I,  142.] 

12.  Where  was  mining  developed  in  the  colonies?  Are  any  metals 
obtained  from  those  same  sections  to-day?  Why?  [Bishop,  I,  chaps.  17, 
18;  Swank,  Hist,  of  Manufacture  of  Iron,  chaps.  9-11.] 

13.  Why  did  the  colonies  levy  import  duties  against  one  another? 
Why  do  they  not  do  so  to-day?     Which  is  better? 


COLONIAL   INDUSTRIES  61 

14.  Describe  the  domestic  system  of  industry.  [Taylor,  Factory 
System;  Ashley,  Early  Hist,  of  Woollen  Ind.,  in  Publ.  Amer.  Econ.  Asso., 
II,  366;  also  in  Econ.  Hist.;  Cheyney,  Introduction,  153,  185,  188,  220; 
Seligman,  Princ.  of  Econ.,  92.] 

15.  Describe  more  fully  the  following  colonial  manufactures:  print- 
ing, brewing,  paper,  glass.  [Bishop,  I,  see  Index;  Wright,  Ind.  Evol., 
chap.  5;  Eggleston,  Commerce  in  the  Colonies.] 

SELECTED  REFERENCES.     CHAPTER  IV 

* American  Industries  since  Columbus.     In  Popular  Science  Monthly, 

XXXVIII,  145,  314,  449,  586;  XXXIX,  176,  289,  454,  729;  XL,  15, 
145,  473,  623. 

**Bishop:  History  of  American  Manufactures,  I. 

**Eggleston:  Commerce  in  the  Colonies.  In  Century  Magazine,  III,  61, 
724;  V,  431;  VI,  234,  848;  VII,  873;  VIII  387. 

*Greene:  Provincial  America,  chaps.  16,  17. 

*Webster:  General  History  of  Commerce,  321-345. 

Bolles:  Industrial  History  of  the  United  States. 

Eighty  Years'  Progress,  274-435. 

Hart:  American  History  told    by  Contemporaries,  II,  chap.  13. 

Lossing:  History  of  American  Industries. 

Shaler:  The  United  States,  I,  chap.  10. 

Wright:  Industrial  Evolution  of  the  United  States,  11-114. 


CHAPTER   V 
AGRICULTURE  AND   LAND  TENURE 

59.  Colonial  occupations.  —  During  the  colonial  period  agri- 
culture was  the  main  and,  except  in  New  York  and  New  Eng- 
land, the  only  important  industry.  In  those  sections  commerce 
and  fishing  afforded  other  outlets  for  enterprise,  but  even 
there  agriculture  remained  the  most  important  industry  until 
after  the  beginning  of  the  nineteenth  century.  When  the 
first  colonists  landed  they  were  compelled  to  resort  immediately 
to  the  raising  of  food  supplies,  to  keep  them  from  starving,  and 
what  necessity  dictated  at  first,  was  found  later  to  afford  the 
largest  returns.  In  the  Virginia  Colony  misguided  efforts  w^ere 
made  at  the  outset  to  direct  the  energies  of  the  colonists  into 
other  channels,  especially  manufactures,  by  legislation  and  the 
offer  of  prizes  and  bounties,  but  the  production  of  the  more 
profitable  tobacco  soon  absorbed  all  the  energies  of  the  colonists. 
In  New  England,  on  the  other  hand,  the  effects  of  a  sterile  soil 
and  severe  climate  were  supplemented  by  the  restrictive  legis- 
lation of  England,  which,  by  partially  depriving  the  colonists  of 
a  market  for  their  agricultural  staples,  helped  to  direct  their 
efforts  to  fishing,  ship-building,  and  commerce.  The  same 
circumstances  characterized,  to  a  less  degree,  the  occupations 
of  the  middle  colonies.  In  all  the  colonies,  agriculture  was 
the  foundational  industry,  and  limited  and  determined  manu- 
factures and  commerce,  where  these  existed. 

60.  Pioneer  farming.  —  The  great  attraction  offered  by 
America  to  the  industrious  settler  —  as  by  every  new  country 
—  was  an  assured  and  independent  existence.  Owing  to  the 
quantity  of  free  land,  to  be  had  practically  for  the  asking,  and 
the  great  fertility  of  the  soil,  even  the  pioneer  with  little  or  no 

62 


AGRICULTURE    AND    LAND    TENURE  63 

capital  could  set  up  for  himself  and  earn  a  living  from  the  very 
beginning..  Clearing  a  few  acres  for  corn  and  a  garden,  and 
building  a  rude  house  alone  or  with  the  aid  of  his  neighbors, 
he  could,  like  the  Indian,  eke  out  his  existence  the  first  year  or 
so  with  the  aid  of  gun  and  net.  After  the  second  or  third  year, 
by  clearing  more  land  and  raising  a  few  cattle  and  hogs,  his 
living  was  assured;  and  a  large  family,  so  far  from  being  a 
burden,  but  made  his  work  the  easier.  Such  a  pioneer  farm, 
as  were  most  of  those  in  the  northern  colonies,  was  almost 
self-sufficing,  producing  practically  everything  needed  in  the 
household.  All  the  necessary  food,  as  well  as  flax,  wool,  and 
hemp  for  clothing,  leather  for  shoes,  lumber  for  building,  were 
raised  at  home.  The  few  things  not  thus  produced,  such  as 
salt,  sugar,  tea,  coffee,  and  iron  implements,  could  be  pur- 
chased with  the  surplus  produce.  Unless  situated  on  a  river, 
with  easy  access  to  a  market,  there  was  little  or  no  money 
profit  in  such  an  undertaking;  the  average  colonial  farmer 
handled  little  ready  cash  in  the  course  of  his  life. 

In  the  South  the  character  of  the  staple  products  —  tobacco, 
rice,  indigo,  etc.  —  demanded  considerable  capital,  and  con- 
sequently the  land  fell  into  the  hands  of  a  wealthier  set  of 
proprietors.  But  even  here  the  small  farmer,  without  the 
necessary  capital  to  buy  slaves  or  large  plantations,  was  able 
to  support  himself  in  comfort,  if  not  in  luxury.  The  interior 
counties  of  all  the  southern  colonies  saw  a  considerable  settle- 
ment of  these  yeoman  farmers. 

61.  A  Jack  of  all  trades.  —  While  practically  every  man  in 
the  early  colonial  period  was  a  farmer,  every  farmer  was  at 
times  also  hunter  and  trapper,  lumberman,  or  sailor.  The 
pioneer  settler,  as  later  the  frontiersman,  supplemented  his 
efforts  in  the  fields  by  hunting  and  fishing  as  long  as  game 
abounded.  Both  for  personal  use  and  for  sale  for  cash  or  sup- 
plies furs  were  in  constant  demand.  With  the  growth  of 
settlements  and  the  disappearance  of  wild  game,  the  colonist 
devoted  his  spare  time  to  getting  out  rough  lumber  products, 
such  as  planks,  staves,   and  shingles.     These  could  be  made 


64        ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

during  the  long  winter  months,  by  the  fireside  of  an  evening, 
while  the  women  spun  or  wove.  On  the  coast  ships  were 
built,  and  from  every  Xew  England  town  many  a  farmer's  boy 
went  on  the  fishing  expeditions  to  the  Newfoundland  banks. 
It  was  not  long  before  these  industries  became  so  important  as 
to  call  for  the  full  time  of  those  who  pursued  them,  ^yith  the 
growth  of  towns  there  was  increasing  opportunity^  also  for 
division  of  occupations,  but  the  farmer  in  the  rural  districts 
had  to  be  a  Jack  of  all  trades  throughout  the  whole  colonial 
period.  Even  in  the  towns  a  man  was  accustomed  to  turn 
his  hand  to  almost  anything  that  offered.  Weeden  gives  an 
account  of  one  John  Marshall,  who  was  a  good  typical  specimen 
of  such  laborers.  He  '^  received  about  4  shillings  a  day  at 
Braintree  from  1697  to  1711.  He  farmed  a  little,  made  laths 
in  the  winter,  was  painter  and  carpenter,  was  messenger,  and 
burned  bricks,  bought  and  sold  live  stock.  He  was  a  non- 
commissioned officer  in  the  Braintree  Company,  and  a  con- 
stable of  the  precinct.  In  one  day  he  could  make  300  laths." 
62.  Agriculture  of  Europe.  —  We  shall  secure  the  fairest 
picture  of  colonial  agriculture  if  we  notice  briefly  its  develop- 
ment in  Europe  at  the  time  when  America  was  settled;  for  the 
general  equipment  of  knowledge  and  implements  with  which 
the  colonists  began  their  work  in  this  country  determined  their 
immediate  advance.  The  principal  cultivated  plants  of  Europe, 
and  more  particularly  Great  Britain,  at  the  beginning  of  the 
seventeenth  century  were  few:  wheat,  barley,  oats,  rye,  beans, 
peas,  vetches,  onions,  cabbages,  and  apples.  The  list  of  tools 
was  still  shorter:  those  drawn  by  domestic  animals  were  the 
plow,  harrow,  and  cart;  of  hand  implements,  there  were  the 
sickle,  hoe,  and  spade,  essentially  the  same  as  had  been  used 
by  the  Egyptians  four  thousand  years  before;  the  flail  and 
fanning  mill,  and  the  axe,  completed  the  list.  But  simul- 
taneously with  the  settlement  of  America  there  began  a  won- 
derful improvement  in  the  agriculture  of  Great  Britain  through 
the  introduction  of  the  turnip  and  other  root  crops,  the  clovers 
and  artificial  grasses.     These  made  possible  a  more  scientific 


AGRICULTURE   AND   LAND    TENURE  65 

rotation  of  crops  and  the  abandonment  of  the  wasteful  two- 
field  and  three-field  system.  This  improvement  in  British 
agriculture  continued  for  over  a  century,  from  about  1600  to 
1732,  and  emigrants  to  America  during  this  period  brought 
with  them  the  results  of  these  advances. 

63.  Indian  agriculture.  —  The  colonists  were  also  the  bene- 
ficiaries of  the  knowledge  of  the  Indians,  from  whom  they 
rapidly  learned  the  best  methods  of  raising  the  indigenous 
crops,  as  well  as  economical  methods  of  clearing  and  preparing 
the  land  for  cultivation.  As  the  early  colonists  practically 
adopted  the  Indian  methods  a  description  of  these  will  serve 
as  a  picture  of  primitive  colonial  agriculture.  Localities 
naturally  devoid  of  trees  were  selected  for  cultivation  where 
possible,  or  partial  clearings  were  made  in  the  forest  by  killing 
the  trees,  either  by  girdling  them  with  stone  axes  or  by  building 
fires  around  their  bases.  When  they  fell,  they  were  burned 
into  suitable  lengths,  rolled  into  a  heap  and  reduced  to  ashes; 
in  this  way  the  land  was  cleared  with  a  minimum  of  labor.  It 
was  estimated  that  an  industrious  woman  could  burn  off  as 
many  dry  fallen  trees  in  a  day  as  a  strong  man  could  cut  with  a 
steel  axe  in  two  or  three  days.  Even  before  the  deadened 
trees  fell  the  underbrush  was  cleared  off  and  the  corn  planted 
amid  the  standing  trunks.  The  corn  was  planted  in  rows,  and 
a  dead  fish  often  dropped  as  a  fertilizer  into  the  hole  with  the 
kernels;  later  it  was  hilled  a  foot  or  two  high,  and  beans  and 
pumpkins  planted  between  the  rows.  This  primitive  agricul- 
ture was  not  merely  rude;  it  was  extremely  wasteful  and  dis- 
orderly. But  it  had  the  merit  of  yielding  quick  and  fairly 
large  immediate  returns  for  a  minimum  of  labor  expended,  and 
on  this  account  was  largely  employed  by  the  early  colonists. 

64.  Colonial  methods  of  farming.  —  The  processes  and 
methods  of  farming  were  primitive  and  traditional  during  the 
whole  of  the  colonial  period.  Custom  and  often  superstition 
controlled  every  step,  and  there  was  little  or  no  advance  made 
after  the  middle  of  the  eighteenth  century,  when  agriculture 
had  probably  fallen  to  its  lowest  ebb.     Rotation  of  crops  was 

6 


66        ECONOMIC   HISTORY    OF    THE    UNITED   STATES 

unknown  and  manures  were  but  little  used.  The  Swedish 
traveler  Kalm,  writing  of  the  James  River  Colony  in  1748-9, 
said,  ''  They  make  scarce  any  manure  for  their  corn-fields,  but 
when  one  piece  of  ground  has  been  exhausted  by  continual 
cropping,  they  clear  and  cultivate  another  piece  of  fresh  land, 
and  when  that  is  exhausted  proceed  to  a  third."  Near  the 
seacoast,  indeed,  they  did  fertilize  their  crops  by  planting 
fish  with  the  grain,  as  they  had  been  taught  by  the  Indians, 
but  this  was  not  everywhere  possible. 

Contemporary  critics  invariably  called  attention  to  the 
wasteful  and  unintelligent  methods  of  agriculture  practised  in 
all  the  colonies.    The  author  of  "  American  Husbandry,"  writing 


A  Colonial  Wheel  Plow  of  1748. 
The  plow,  which  was  chimsy  and  short,  was  sometimes  attached  to 
a  pair  of  wheels.  The  ill-shaped  share  and  mold-board  did  not 
plow  deep  or  straight,  and  great  strength  and  skill  were  necessary 
to  guide  the  plow.  *'  The  wheels  upon  which  the  plow-beam  is 
placed,  are  as  thick  as  the  wheels  of  a  cart,  and  all  the  woodwork  is 
so  clumsily  made  that  it  requires  a  horse  to  draw  the  plow  along  a 
smooth  field."     (Kalm,  "Travels  in  No.  Amer.,"  II,  195). 

just  before  the  Revolution,  criticises  severely  the  general 
practice  of  exhausting  the  land  by  planting  the  same  crop 
year  after  year:  "  they  have  not  a  just  idea  of  the  importance 
of  throwing  their  crops  into  a  proper  arrangement,  so  as  one 
may  be  a  preparation  for  another,  and  thereby  saving  the 
barren  expence  of  a  mere  fallow."  He  complains  of  the  lack  of 
enclosed  fields  to  keep  out  the  cattle,  of  the  insufficient  and 
slovenly  tillage  —  "  worse  ploughing  is  nowhere  to  be  seen," 
—  and  finally  of  the  poorness  of  their  implements.  On  the 
other  hand,  it  must  be  remembered  that  the  soil  was  extremely 
rich  and  did  not  require  very  careful  tillage  to  jdeld  large  re- 
turns.    And  when  the  productiveness  of  the  soil  was  reduced 


AGRICULTURE   AND   LAND    TENURE  67 

it  was  cheaper  to  take  up  fresh  land,  of  which  there  were  prac- 
tically unlimited  quantities,  than  to  restore  the  exhausted 
qualities.  While  it  was  not  possible  to  apply  European  stand- 
ards to  the  totally  different  conditions  in  America,  still  it 
must  be  admitted  that  this  process  of  "  earth-butchery  "  led 
to  bad  habits  and  was  ultimately  wasteful  —  a  fact  to  which 
the  country  has  only  recently  awaked. 

65.  Experimentation  and  adaptation.  —  The  problems  pre- 
sented to  the  colonists  in  the  growth  of  crops  were  many  and 
peculiar.  They  came  to  a  country  whose  climate  and  soil 
were  unfamiliar  to  them.  The  qualities  of  the  native  plants 
with  which  they  were  confronted  had  to  be  determined  by 
experience.  Seeds  and  plants  from  every  part  of  Europe  and 
even  from  Asia  and  the  West  Indies,  which  were  brought  here 
by  settlers,  had  first  to  be  tried  in  each  colony  before  it  was 
known  in  what  soil  or  clime  they  would  best  flourish.  For  a 
century  and  a  half  this  process  of  experimentation,  adaptation, 
naturalization,  and  selection  continued  in  all  the  American 
colonies,  and  so  successfully  that  in  the  next  one  hundred  years 
only  a  single  commercially  important  new  plant,  namely 
sorghum,  was  introduced  into  the  United  States.  ''  Hemp, 
indigo,  rice,  cotton,  madder,  millet,  spelt,  lentils,  lucerne,  sain- 
foin, were  tried  and  failed  in  New  England."  In  the  southern 
colonies  wine  and  silk  culture,  and  such  products  as  cinnamon, 
olives,  and  allspice,  were  tried,  but  were  found  unsuited  to  that 
climate.  On  the  other  hand,  many  European  crops  proved  to 
be  especially  adapted  to  the  new  environment  and  have  become 
fully  acclimatized.  There  was,  however,  practically  no  im- 
provement in  the  plants,  vegetables,  and  fruits  by  culture  and 
selection,  after  they  were  once  introduced. 

66.  Native  plants.  —  To  the  early  settlers  the  indigenoiis. 
plants  which  they  found  in  the  new  world  were  of  far  greater 
importance  than  those  which  they  brought  with  them.  Of 
these,  by  far  the  most  important  at  the  time  and  in  the  subse- 
quent history  of  the  country  was  maize  or  Indian  corn.  The 
advantages  of  this  grain  lay  not  merely  in  the  speedy  maturity, 


68 


ECONOMIC   HISTORY    OF    THE    UNITED    STATES 


the  large  yield,  the  independence  of  seasonal  changes,  and  the 
usefulness  of  all  parts  of  the  plant,  but  especially  in  the  ease 
with  which  it  was  cultivated.     The  early  settlers  soon  learned 

from  the  Indians  the  trick  of  plant- 
ing it  among  the  deadened  forest 
trees,  without  ploughing,  with  the 
pumpkin  in  the  interstices  of  the 
hills.  Without  this  grain  the  early 
settlements  would  have  been  much 
more  difficult  of  establishment. 
Maize,  indeed,  formed  the  main  food 
crop  of  the  colonists  throughout  their 
entire  history. 

Of  considerable  consequence  also 
was  the  potato,  both  sweet  and  white. 
The  food  value  and  methods  of  cook- 
Hand  Corn  Sheller        "^^   ^^e   former   were    early   learned 
To  shell  corn  from  the  ears  ^^^^    the    Indians    and    the    sweet 
was  one  of  the  tasks  carried  potato  was  in  general  use  throughout 
on  in  colonial  times  durins;    ,,  ,,  ,       .  ,,,,,  .,       ,. 

the  long  ^yinter  evenings.  It  the  Southern  colonies.  While  the 
was  usually  done  by  scraping  early  history  is  somewhat  obscure  it 
the  ears  on  the  iron  edge  ot  ^    •      .1     .     .1  i  •. 

the  shovel  or  the  handle  seems  certain  that  the  white  potato 
of  a  fryirig-pan,  but  some-  was  carried  from  Peru  or  Chili,  where 
times     primitive     hand-ma-    .,  .     ,.  .    ,      ^      .         ,        , 

chines  were  used.  it  was   indigenous,  into  bpaiii  about 

the  middle  of  the  sixteenth  century. 
From  that  country  its  use  spread  throughout  Europe,  and  it 
was  introduced  from  England  into  North  America  ,by  the 
colonists  early  in  the  eighteenth  century.  Since  that  time  it 
has  been  an  article  of  general  consumption,  although  it  has 
not  occupied  such  an  important  place  in  this  country  as  in  the 
European  dietary. 

Timothy  is  another  distinctively  American  plant,  its  culti- 
vation having  begun  about  1750.  A  few  years  later  it  was 
introduced  into  England  from  this  country.  This  plant  was 
of  vast  economic  importance  in  the  northern  portions  of  the 
United    States,   where    it    was   necessary   to    feed    live-stock 


i 


AGRICULTURE    AND    LAND    TENURE 


6'J 


during  the  winter  upon  hay  gathered  during  the  summer 
months.  In  the  earlier  colonial  period  cattle  often  starved  to 
death  in  the  long,  severe  winter,  owing  to  a  scarcity  of  food. 

Among  other  plants  which  the  early  colonists  found,  and 
w^hich  had  an  important  effect  upon  their  dietary,  should  be 
mentioned  the  pumpkin,  squash,  and  probably  also  the  straiv- 
herry. 


Tobacco  Field 
Tobacco  is  grown  in  many  parts  of  the  United  States,  from  southern 
Wisconsin  to  Louisiana,  but  the  largest  tobacco  area,  about  600  miles 
long  and  400  miles  wide,  extends  from  Kentucky  to  Maryland,  and 
from  central  Ohio  to  North  Carolina.  The  illustration  shows  a 
modern  tobacco  field  of  the  best  type,  as  is  evidenced  by  the  size  of 
the  plants.  The  head  of  the  plant  to  the  left  of  the  man  is  tied  up 
in  white  paper  to  catch  the  seed. 

67.  Tobacco.  — Of  all  America's  gifts  to  the  Old  World  the 
most  widely  accepted  has  been  tobacco.  It  was  mentioned 
in  Columbus's  diary  for  November  20,  1492,  and  is  commonly 
understood  to  have  been  introduced  from  America  into  England 
by  Sir  Walter  Raleigh  about  1584.     It  soon  came  into  general 


70        ECONOMIC   HISTORY    OF    THE    UNITED    STATES 

use  and  was  made  the  object  of  regulation  by  successive  Eng- 
lish monarchs.  In  1624  it  became  a  royal  monopoly,  and  in 
1624,  1627,  and  again  in  1631,  the  cultivation  of  the  plant  in 
England  was  forbidden.  About  1616  its  serious  cultivation 
began  in  Virginia,  and  from  that  time  increased  rapidly,  until 
it  had  displaced  all  other  crops  and  most  other  forms  of  in- 
dustry. From  the  very  beginning  tobacco  was  one  of  the 
greatest  articles  of  export  from  the  North  American  colonies, 
constituting  between  one  fourth  and  one  half  of  all  the  exports 
during  the  colonial  period.  The  first  shipment,  in  1619, 
amounted  to  20,000  pounds;  in  the  ten  years  1700  to  1709 
the  average  annual  export  was  28,858,666  pounds;  by  1775, 
85,000  hogsheads  were  exported  annually,  whose  value  was 
about  $4,000,000. 

The  production  of  tobacco  was  carried  on  in  a  very  wasteful 
manner:  the  land  was  cleared  by  girdling  the  trees,  and  was 
then  planted  in  tobacco  for  three  years  and  afterwards  in  corn. 
As  artificial  fertilizing  was  not  resorted  to,  this  method  resulted 
in  exhaustion  of  the  soil  in  from  three  to  eight  years,  when  fresh 
land  had  to  be  taken  up.  The  population  was  consequently 
widely  dispersed,  the  plantations  of  Virginia  in  1685  covering 
an  area  as  large  as  England  itself. 

The  table, ^  on  page  71,  gives  a  partial  list  of  plants  of  Amer- 
ican origin. 

68.  Other  plants.  —  The  principal  European  grains  and 
fruits  were  early  introduced  into  the  colonies,  and  their  cul- 
tivation proceeded  side  by  side  with  those  of  native  origin. 
Indeed,  the  majority  of  the  plants  of  great  economic  value 
to-day  are  of  foreign  origin.  Next  to  maize  the  principal 
crops  of  the  North  were  x^  and  Viuol^-^vjipflt.  and  following 
these  wheat,  oats,  and  some  barley.  The  culture  of  wheat  was 
given  special  attention  and  met  with  considerable  success  in 
the  middle  colonies.  In  the  southern  colonies,  after  tobacco, 
rice  was  the  most  important  crop.  Introduced  into  South 
Carolina  in  1694,  it  grew  abundantly;  by  1724,  100,000  barrels 
1  Hill,  Lectures  on  History  of  Agriculture,  99. 


AGRICULTURE    AND    LAND    TENURE 


71 


were  exported  from  that  colony  alone,  and  in  1761,  when  the 
white  population  was  not  more  than  45,000,  the  value  of  the 
rice  crop  was  over  $1,500,000.  Little  cotton  was  produced 
during  this  period,  but  indigo,  which  was  first  successfully 
planted  in  1741,  was  of  considerable  importance;  in  the  last 
decade  before  the  Revolution,  South  Carolina  alone  exported 
500,000  pounds  a  year,  worth  from  two  to  five  shillings  a 
pound.  Various  fruits  were  early  brought  over  from  Europe, 
and  grown  wherever  climate  and  soil  were  favorable,  of  which 
apples  and  pears  w^ere  the  most  common;  in  addition  to  these 
were  stores  of  wild  fruits,  as  plums,  grapes,  and  cherries,  and 
berries  and  nuts  to  be  had  for  the  gathering. 


Cultivated  before  dis- 

Cultivated only 

vation  in  America 

covery  of  America,  but 

since  discovery  of 

of  no  great  antiquity 

America 

Cultivated   for 

Sweet  potato 

Jerusalem  artichoke 

underground 

Potato 

parts 

Cultivated   for 

Tobacco 

American  aloe 

Quinine 

stem        and 

Timothy 

leaves 

Orchard  grass 

Cultivated   for 

Pumpkin 

Strawberry 

fruit 

Squash 
Red  pepper 
Tomato 
Pineapple 

[Cranberry?] 

Cultivated   for 

Maize 

Sugar  bean 

seeds 

Barbadoes  cotton 
Peanut 

In  general  the  principal  agricultural  products  of  the  colonies 
were  as  follows:  New  England  and  the  middle  colonies,  corn, 
rye,   oats,  buckw^heat,  wheat,   and  barley,  with  some  tobacco 


72        ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

from  Connecticut;  Maryland  and  Virginia,  tobacco;  the  Caro- 
linas,  tobacco,  rice,  indigo,  corn,  and  a  little  cotton;  Georgia, 
rice  and  indigo.  Wool,  flax,  and  hemp  were  also  raised  in 
considerable  quantities  for  home  use  in  the  different  colonies. 

69.  Live  stock.  —  European  cattle  were  imported  into 
Spanish,  French,  and  English  colonies  at  a  very  early  date, 
and  increased  very  rapidl}^,  especially  in  the  South  and  South- 
west. The  cattle  brought  over  from  England  were  much 
smaller  than  our  present  stock.  According  to  Prothero,  the 
average  size  of  cattle  and  sheep  sold  in  Smithfield  market, 
London,  as  late  as  1710,  was,  beeves,  370  lbs.;  calves,  50  lbs.; 
sheep,  28  lbs.;  lambs,  18  lbs.  The  reason  for  the  small  size 
was  that  little  or  no  attention  was  paid  to  the  culture  of  grasses 
and  vegetables  for  feeding  the  stock;  they  were  left  to  graze, 
winter  and  summer.  In  1795,  after  the  general  introduction 
into  England  of  root  crops  and  artificial  grasses  and  clovers, 
the  weights  in  London  were  beeves,  800  lbs.;  calves,  148  lbs.; 
sheep,  80  lbs.;  lambs,  50  lbs. 

The  severe  climate  of  New  England  caused  a  deterioration 
in  the  stock  of  that  section;  in  the  southern  colonies,  where 
they  were  turned  loose  in  the  forests,  they  multiplied  rapidly. 
The  author  of  "  American  Husbandry  "  reserved  his  severest 
criticism  for  this  feature  of  American  farming:  "  Most  of 
the  farmers  in  this  country  are,  in  whatever  concerns  cattle, 
the  most  ignorant  set  of  men  in  the  world.  Xor  do  I  know 
of  any  country  in  which  animals  are  worse  treated.  Horses 
are  in  general,  even  valuable  ones,  worked  hard,  and  starved: 
they  plough,  cart,  and  ride  them  to  death,  at  the  same  time 
that  they  give  very  little  heed  to  their  food;  after  the  hardest 
day's  work,  all  the  nourishment  they  are  like  to  have  is  to  be 
turned  into  a  wood,  where  the  shoots  and  weeds  form  the  chief 
of  the  pasture;  unless  it  be  after  the  hay  is  in,  when  they  get 
a  share  of  the  after-grass.  .  .  .  This  bad  treatment  extends 
to  draft  oxen;  to  their  cows,  sheep,  and  swine." 

By  1639,  the  Jamestown  Colony,  in  spite  of  this  bad  treat- 
ment, already  had  30,000  cattle;  in  1770,  Wynne  described  the 


AGRICULTURE    AND    LAND    TENURE  73 

large  herds,  often  numbering  a  thousand  cattle,  that  were 
found  in  the  Carolinas.  Cattle-raising  was  an  important 
frontier  industry  in  many  of  the  colonies,  and  dairy  products 
w^ere  yielded  in  all  of  them  for  home  use.  Considerable  quan- 
tities of  butter  and  cheese  were  produced  in  New  Jersey  for 
export.  Of  animal  food  there  were  also,  in  addition  to  domes- 
ticated animals,  plentiful  supplies  of  wild  game  and  fish  in  all 
the  colonies. 

70.  Farm  implements.  —  One  of  the  greatest  obstacles  to 
agricultural  progress  was  the  scarcity  and  rudeness  of  the 
farming  implements  whicti  the  colonists  possessed.  Plows 
were  imported  from  time 
to  time,  but  they  were  ex- 
tremely heavy  and  un- 
wieldy. In  1637,  there 
were  but  37  plows  in  the 
colony  of  Massachusetts 
Bay,  and  towns  often  paid  Wooden  Harrow  and  Fork 

a  bounty  to  any  one  who     The  harrow  was   triangular,  and  yoked 

wmild  kppn  n  nlow  in  re-  ^^'^^^  °^^  °^  *^^  angles  forward  in  order 
would  keep  a  plow  in  re     ^^  ^^^^  ^^^^  ^^^.^^  ^^^^^^  ^^^^^p^  ^^ 

pair,    in    order    to    do    the     trees  and  other  obstacles.     The  teeth  of 

plowing  for  the  commun-  l^-de'^Sirei/^f  ^vood"  '""  ""''  "'^^ 
ity.     Virginia  was   rather 

better  off  inthis  respect,  having  150  plows  by  1648.  The  massive 
old  w^ooden  plow%  with  mold-board  of  wood,  required  frequently 
four  oxen  and  three  men  to  manage  it.  In  addition  to  this 
implement,  the  colonists  had  the  spade,  a  clumsy  wooden  fork, 
and  now  and  then  a  harrow.  All  of  these  were  clumsily  made 
of  wood;  the  only  metal  available  was  made  of  bog  iron  ore, 
w^hich  w^as  very  brittle  and  made  the  implement  liable  to  break 
in  the  middle  of  a  day's  work.  The  grain  was  usually  sepa- 
rated from  the  chaff  in  the  southern  provinces  by  the  tread- 
ing of  horses  on  threshing-floors;  in  the  North  the  flail,  though 
slower,  was  more  generally  used. 

71.  Land  tenures.  —  At  the  time  of  the  settlement  of  North 
America  land  in  Europe  was  still  generally  held  on  feudal  tenures, 


74        ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

and  the  possession  of  land  carried  with  it  both  social  and 
economic  privileges.  The  land  system  was  a  most  intricate 
one,  and  land  could  be  transferred  only  by  elaborate  feudal 
methods,  while  the  rights  of  inheritance  and  bequest  were  still 
further  limited.  Ownership  vested  in  a  few,  and  not  even  the 
greatest  thrift  could  obtain  for  the  poor  man  a  farm  of  his  own. 
But  land  in  a  new  country,  where  it  could  be  had  almost  for 
the  asking,  soon  came  to  be  held  and  transferred  like  any  other 
species  of  property,  and  ownership  of  it  conferred  no  special 
rights,  except  as  it  was  sometimes  made  a  condition  to  office- 
holding  or  the  franchise.  In  some,  especially  the  proprietary 
colonies,  large  estates  were  created  whose  proprietors  enjoyed 
special  privileges,  while  it  was  also  made  difficult  for  small 
proprietors  to  secure  land.  The  Revolution,  however,  swept 
away  practically  all  traces  of  feudal  land  tenure  or  feudal  land 
law\s.  Generally  speaking,  the  older  colonies  were  founded 
by  private  companies  or  individuals,  and  the  land  was  com- 
monly vested  in  them,  and  by  them  regranted  to  immigrants, 
usually  upon  payment  of  a  quitrent.  In  the  other  colonies, 
and  even  in  time  in  the  proprietary  colonies,  the  land  was 
taken  up  by  the  settlers  according  to  their  needs  and  pleasure. 
72.  Land-holding  in  New  England  and  the  middle  colonies. 
—  When  the  first  settlement  was  made,  the  Pilgrims  held  their 
land  and  other  property  on  a  communal  basis,  turning  their 
labor  and  products  into  a  common  pool,  but  a  few  years  of 
failure  caused  the  abandonment  of  this  plan,  as  had  been  the 
case  several  years  before  in  Virginia.  The  land  was  taken  up 
by  individuals,  title  being  given  by  the  London  Company  or 
by  the  crown;  generally,  too,  care  was  taken  to  extinguish  the 
Indian  title.  Each  of  the  original  or  new  settlers  was  granted 
a  certain  number  of  acres  as  his  share  in  the  colony.  Large 
estates  never  grew  up  in  New  England,  but  small  farms  were 
the  rule,  owing  largely  to  the  character  of  the  soil  and  the 
crops,  which  necessitated  careful  cultivation.  Throughout  the 
whole  section,  and  as  far  south  as  Delaware,  communal  hold- 
ings in  the  towns  were  also  found;  fields  —  usually  three  — 


AGRICULTURE   AND    LAND    TENURE  75 

were  at  first  held  in  common,  and  the  cultivation  was  decided 
each  year  in  general  meeting.  Later,  as  the  towns  filled  up 
and  grew  strong  enough  to  protect  outlying  fields  against 
raids,   the  arable  meadowy  and  wood  land  was  divided. 

In  the  middle  colonies,  the  land  system  was  practically  the 
same  as  in  New  England,  both  in  character  and  results.  Small 
farms  held  in  fee  simple  were  the  rule.  The  only  exception  lay 
in  the  large  manorial  grants  made  by  the  Dutch  and  confirmed 
and  extended  by  the  early  English  governors  in  New  York. 
The  manorial  system,  however,  was  restricted  to  the  valley 
of  the  Hudson,  and  the  large  estates  of  from  50,000  to  even 
1,000,000  acres  lay  in  large  part  uncultivated  until  they  were 
broken  up  into  small  holdings. 

73.  The  plantations  of  the  South.  —  While  small  farms  were 
characteristic  of  the  North,  large  plantations  were  in  vogue  in 
the  South,  though  in  both  sections  there  were  exceptions  to  the 
general  rule.  These  large  landed  estates  were  owned  by 
comparatively  few  proprietors,  who  constituted  an  aristocratic 
upper  class  in  a  strongly  stratified  society.  The  difference 
betw^een  New  England  and  the  South  was  mainly  the  result  of 
economic  causes:  the  fertile  soil  and  the  presence  of  a  few 
staples  which  lent  themselves  to  extensive  cultivation  made 
the  large  plantation  profitable  in  the  southern  colonies.  The 
average  size  of  the  Virginia  estate  was  about  5000  acres,  while 
in  New  England  the  average  farm  was  probably  not  far  from 
100  acres.  On  the  other  hand,  in  the  seventeenth  century, 
the  value  of  an  acre  of  New  England  land  was  about  fourteen 
times  that  of  an  acre  in  Virginia. 

'The  law  and  practice  regarding  grants  and  inheritance  was 
also  partly  responsible  for  the  enormous  estates  of  Virginia 
and  of  other  colonies.  Grants  were  made  to  the  companies 
and  "  adventurers,"  who  undertook  to  establish  colonies;  as 
"  head  right  "  for  the  importation  of  settlers;  to  the  settlers 
themselves;  for  meritorious  service,  to  clergymen,  physicians, 
and  even  to  servants;  or  as  gifts  for  purely  personal  reasons. 
The  occupation  of  the  land  granted   and  the   payment  of  a 


76        ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

small  annual  quitrent  were  the  usual  conditions  to  the  issuance 
of  a  patent. 

Inheritance  in  the  southern  colonies,  as  also  in  New  York, 
followed  the  law  of  primogeniture;  the  principle  of  entail  was 
even  more  strictly  applied  in  these  colonies  than  in  England. 
In  New  England  and  Pennsylvania,  while  the  right  of  the 
eldest  son  was  still  recognized,  he  received  only  a  double  por- 
tion, the  rest  of  the  property  being  divided  equally  among  the 
other  children.  Primogeniture  and  entail  were  not  abolished 
entirely  until  the  Revolution. 

SUGGESTIVE  TOPICS   AND   QUESTIONS.     CHAPTER   V 

1.  What  were  the  characteristics  of  land  tenure  in  feudal  times? 
[Bliss,  Encycl.  of  Soc.  Ref.,  art.  Land;  A.  R.  Wallace,  Land  Nationaliza- 
tion, 22-25;  de  Laveleye,  Primitive  Property.] 

2.  What  objections  are  there  to  primogeniture  and  entail?  [J.  S. 
Mill,  Princ.  of  Pol.  Econ.,  book  2,  chap.  2;  Bhss,  Encycl.  of  Soc.  Ref.,  art. 
Entail.] 

3.  What  was  livery  of  seizin?  Is  it  as  easy  to  transfer  land  to-day 
as  other  kinds  of  wealth?  [Eggleston,  Transit  of  Civihzation,  275;  Rol^in- 
son,  Elementary  Law,  sects.  75,  76.] 

4.  Describe  the  two-field  and  three-field  systems  of  agriculture  in 
Europe.  [Price,  Engl.  Com.  and  Ind.,  25,  102;  Cunningham,  Outlines, 
172-174;  Warner,  Landmarks,  20,  27;  Cheyney,  Introduction,  36.] 

5.  Compare  the  life  of  a  tenant  farmer  in  England  with  that  of  a  free 
fariner  in  the  colonies.  [Brown,  Genesis  of  U.  S.,  I,  252,  352,  506,  688; 
American  Husbandry,  I,  122,  190-191.] 

6.  Is  "earth-butchery"  still  practised  in  the  United  States? 

7.  Do  you  know  of  any  plants  that  have  been  tried  and  have  failed 
to  grow  in  your  locality?     Why? 

8.  Where  did  the  herds  of  horses  which  the  later  western  pioneers 
found  on  the  prairies  come  from?  What  was  the  origin  of  the  so-called 
''native"  cattle? 

9.  Describe  the  treatment  of  the  Indians  in  the  acquisition  of  title 
to  land  by  the  whites.     [Bruce,  I,  487-499.] 

10.  Why  did  the  attempts  at  communalism  fail  in  Jamestown  and 
Plymouth?  [Fiske,  Old  Va.  and  Her  Neighbors,  I,  chap.  4;  Osgood, 
Amer.  Col.  in  XVIIth  Cent.,  I,  part  1,  chaps.  3,  5;  Brown,  Genesis  of 
U.  S.,  I,  402-413.] 

11.  Was  it  wise  for  the  early  colonists  to  kill  and  burn  the 
forests? 


AGRICULTURE   AND   LAND    TENURE  77 

12.  Where  were  the  forests  most  extensive?  [Shaler,  in  Winsor, 
IV,  14.] 

13.  Describe  the  attempts  of  the  colonists  to  produce  wine,  silk,  etc. 
[Bishop,  I,  passim.] 

14.  Compare  the  native  edible  plants,  and  animals  capal^le  of  domes- 
tication, in  the  Old  and  New  Worlds.  [Shaler,  Nature  and  Man  in  America, 
145.] 

15.  How  did  the  colonists  gain  title  to  their  land?  Was  the  same  true 
in  all  the  colonies?  [Coman,  28,  32-38;  Bruce,  I,  502-519;  Osgood,  Amer. 
Col.  in  XVIIth  cent.,  I,  part  2,  chap.  11.] 

16.  What  effect  has  the  cultivation  of  tobacco  had  upon  the  economic 
organization  of  Virginia?  [Coman.  56-57;  Bruce,  I,  chap.  7;  Fiske,  Old 
Va.  and  Her  Neighbors,  I,  223-231,  II,  184-220;  Ballagh,  Land  Syst.  of 
So.,  117-119.] 

SELECTED   REFERENCES.     CHAPTER  V 

**Bruce:  Economic  History  of  Virginia,  I,  chaps.  4-8. 

*Cheyney:  Early  American  Land  Tenures. 

*Flint:  Agriculture   in   the    United   States,    in    Eighty   Years'    Progress; 

same  article  in  Rep.  U.  S.  Dept.  of  Agric,  1872,  pp.  274-304;  and 

in  Rep.  Mass.  Bd.  of  Agric,  1873,  pp.  11-64. 
*Payne:  History  of  the  New  World  called  America,  I,  316-384,  401-434. 
**Weeden:   Economic  and  Social   History  of  New  England  (see  index, 

"Agriculture"). 
**  [Young,  A.?:]  American  Husbandry. 

Ballagh:  The  Land  System  in  the  South,  101  ff. 

Bolles:  Industrial  History  of  the  United  States,  1-45. 

Brewer:  History  of  Agriculture,  in  10th  Census  (1880),  vol.  Agriculture. 

p.  131. 
McMaster:  History  of  the  People  of  the  United  States,  I,  II  (see  index, 

"Agriculture"). 
Shaler:  The  United  States,  I,  chap.  "The  Farmer's  Opportunities." 


CHAPTER   VT 
THE  SYSTEMS   OF   LABOR 

74.  Labor  conditions  in  England.  —  A  glance  at  the  condi- 
tion of  Tabor  in  England  at  the  beginning  of  the  seventeenth 
century  will  enable  us  to  understand  better  the  situation  in 
the  colonies.  The  opening  of  the  New  World  and  the  extension 
of  freedom  in  politics  and  religion  had  brought  little  improve- 
ment into  the  lot  of  the  workingman  in  the  Old  World.  With 
long  hours  and  heavy  toil,  his  freedom  of  movement  restricted 
to  his  native  parish,  his  wages  laid  down  and  prices  of  goods 
fixed  by  the  justices,  and  few  opportunities  for  employment, 
his  lot  was  indeed  in  many  respects  a  hard  one. 

From  the  eleventh  to  the  middle^of  thejourteenth  century 
the  mass  of  the  laborers  were  in  a  state  of  villeinage,  under  which 
the  villein  held  a  virgate  (about  thirty  acres)  of  land  in  the 
common  fields  of  the  manor,  in  return  for  which  he  rendered 
certain  services  to  his  lord;  legally,  he  was  annexed  to  the 
manor  and  could  not  leave  it.  Although  villeinage  had  been 
abolished  as  early  as  1351,  it  still  lingered  in  places  until 
the  beginning  of  the  seventeenth  century,  and  even  where  it 
disappeared  long  terms  of  service,  during  which  the  servant 
was  little  better  than  a  slave,  took  its  place.  During  his  term 
of  service,  the  labor  of  the  servant  was  assignable  and  the 
servants  w^ere  beaten,  moved  about,  and  sold  like  slaves.  On 
the  other  hand,  the  cessation  of  war  and  the  introdu(5tion  of 
sheep-pastures  had  deprived  many  laborers  of  their  accus- 
tomed employment,  and  forced  them  upon  the  highway  in 
search  of  work,  where  they  constituted  a  real  menace  to  society. 
Small  wonder  is  it  to  find,  therefore,  that  both  the  workingmen 
themselves   and   the   government   of   England   looked   to   the 

78 


THE   SYSTEMS   OF   LABOR  79 

colonies  for  relief  from  the  redundancy  of  an  idle  and  needy 
population. 

75.  Scarcity  of  labor  in  the  colonies.  —  In  all  the  colonies 
there  was  a  great  lack  of  laborers.  On  the  small  farms  of  the 
North  the  proprietor  cultivated  his  own  land,  with  perhaps  the 

.  help  of  his  children,  but  in  the  south^n  colonies  where  large 
plantations  were  the  rule  and  where  large  staple  crops  like 
tobacco  were  raised,  there  was  constant  need  of  additional  c. 
laborers.  As  other  industries  grew  up  beside  agriculture  this 
need  was  intensified,  and  various  systems  of  bringing  laborers 
to  America  were  devised.  Many  of  the  immigrants  who  came 
to  the  colonies  were  without  means  or  lacked  the  energy  to 
engage  in  industry  on  their  own  account,  and  hired  themselves 
out  as  free  laborers,  but  their  number  was  never  very  large. 
IMoreover,  the  abundance  of  free  land  and  the  large  returns  to 
the  cultivator  tempted  most  men  to  become  independent 
farmers  on  a  small  scale  rather  than  remain  hired  laborers. 
The  proportion  of  free  laborers  differed  in  the  various  colonies, 
but  was  always  greatest  in  New  England,  where  slavery  had 
the  slightest  foothold,  and  where  industry  was  the  most  di- 
versified. 

76.  Labor  cooperation.  —  Owing  to  the  scarcity  of  laborers 
who  could  be  hired  to  work  for  pay,  it  was  a  general  practice 
in  New  England,  and  also  in  the  middle  colonies,  for  the  col- 
on ist^_to_exch^ngeJ[abor3d^^  Was  a  house  to  ^ 
be  erected,  a  barn  to  be  raised,  or  a  ship  built  and  launched 
the  settler  called  upon  his  neighbors  to  assist  him  in  the  larger 
operations  that  were  beyond  his  strength  or  skill,  or  that  called 
for  the  associated  effort  of  several  workers.  The  typical  event 
that  called  for  this  cooperative  system  of  labor  was  a  house- 
or  barn-raising;  this  was  made  a  social  occasion,  the  women 
attending  to  provide  a  bountiful  repast,  while  the  men  strove 
with  one  another  in  a  spirit  of  emulation.  It  did  not  take 
long  at  such  a  time  to  erect  the  frame,  rafters,  and  ridge-pole 
of  a  building.  Later,  the  more  usual  method  for  a  man  who 
desired  to  build  a  house  was  to  agree  with  a  carpenter  or 


80        ECONOMIC   HISTORY    OF    THE    UNITED   STATES 

mason  for  so  many  days'  work,  the  owner  working  with  him 
under  his  direction. 

While  labor  was  still  very  scarce  and  even  the  voluntary 
cooperation  of  neighbors  could  not  always  be  depended  on, 
legislation  pro  video  for  the  impressment  of  labor  for  such 
necessary  services  as  harvesting  crops.  In  New  England 
artificers  and  mechanics  might  be  compelled  by  the  constable 
to  leave  their  crafts  and  assist  in  the  harvest -fields  of  their 
neighbors.  The  securing  of  the  food  supply  thus  ranked  with 
military  protection.  In  the  South  there  was  a  larger  propor- 
tion of  servants  —  under  which  term  were  included  not  only 
hired  laborers,  but  also  apprentices  and  indentured  servants, 
—  and  consequently  the  exchange  of  labor  between  independ- 
ent artisans  or  plantation  owners  was  never  so  important. 

77.  Indented  servants.  —  Of  servants  or  unfree  laborers 
there  were  in  the  colonies  two  main  classes:  indented  servants 
and  slaves.  The  indented  servants  again  were  of  two  kinds  — 
l^'^nose  whose  servitude  was  voluntary  and  those  whose  servitude 
was  involuntary.  Voluntary  servitude  was  based  upon  a 
free  contract  with  a  company  or  individual  for  a  definite 
term  of  service  in  return  for  the  payment  of  the  servant's 
transportation  and  his  maintenance  during  the  period  of  ser- 
vice. The  indented  servants  were  free  persons  who  emigrated 
for  the  purpose  of  improving  their  condition;  at  first,  they 
came  chiefly  from  England,  but  later  large  numbers  were 
brought  over  from  Ireland,  Scotland,  Wales,  and  Germany. 
Many  of  these  bond  servants  sold  themselves  into  servitude 
to  the  agents  of  planters,  or  to  shipmasters  or  emigration 
brokers,  or  were  enticed  on  board  a  departing  ship  by  a  so- 
called  "  spirit  "  or  "  crimp."  This  class  of  servants  comprised 
the  majority  of  those  in  servitude,  and  was  confined  chiefly  to 
the  middle  colonies;  in  Maryland  there  seems  to  have  existed 
a  variation  in  the  so-called  "  free-willers."  They  were  trans- 
ported on  the  condition  that  they  be  allowed  a  certain  number 
of  days  in  which  to  dispose  of  themselves  to  the  best  advantage; 
failing  in  this  their  services  were  sold  to  pay  for  their  passage. 


THE   SYSTEMS   OF   LABOR  81 

In  general  the  servants  transported  before  1650  were  bound 
for  long  terms  of  from  seven  to  ten  years  or  more;  after  the 
settlement  of  New  York,  New  Jersey,  the  Carolinas,  and  Penn- 
sylvania, the  demand  was  increased  and  the  term  of  service 
was  reduced  to  four  years.  While  at  first  many  of  these  laborers 
belonged  to  a  low  class,  some  of  them  came  from  the  educated 
and  even  upper  classes.  At  the  end  of  their  terms  of  service 
they  generally  became  independent  proprietors  or  free  laborers 
and  were  merged  in  the  white  population  of  the  colonies, 
becoming  often  highly  respected  citizens.  ^ 

78.  Involuntary  servitude.  —  The  other  large  class  was  com-  /-{Ai-^*^ 
posed  principally  of  paupers,  vagrants,  "loose  and  disorderly^C^^t^ivT 
persons,"  and  criminals,  who  were  sent  to  the  colonies  by  77/^/  , 
royal  order  or  court"  sentence,  or  later  by  judges  under  the  w  ^j^ 
English  penal  statutes.     The  transportation  of  these  persons  ^^^ 

to  America  seems  to  have  been  dictated  at  first  largely  by  '  ^ie 
motives  of  humanity.  There  were  at  this  time  t hree  .hundred  ^^, 
crimes  in  the  English  calendar  for  which  capital  punishment 
was  inflicted,  and  justices  often  mercifully  substituted  trans- 
portation for  death;  at  the  same  time  the  need  of  men  in  the 
colonies  afforded  an  excuse  for  evasion  of  the  death  penalty. 
During  the  eighteenth  century,  by  virtue  of  acts  of  Parliament, 
a  convict  was  permitted  to  have  his  sentence  commuted,  in 
case  of  the  death  penalty,  to  fourteen  years'  service,  while  a 
seven  years'  service  might  be  substituted  for  whipping  and 
branding.  While  most  of  the  convicts  thus  sent  over  belonged 
to  the  criminal  class,  many  of  them  were  guilty  of  nothing 
more  serious  than  debt,  and  a  large  proportion  were  political 
prisoners  who  had  engaged  in  some  rebellious  movement. 

Acts  were  passed  by  the  colonies  designed  to  prevent  the 
importation  of  convicts,  and  in  1671  an  order  was  passed  in^^ 
England  to  put  an  end  to  the  traffic.  It  seems  not  to  have 
been  observed,  however,  and  in  1717  Parliament  enacted  a 
statute  against  the  protests  of  the  Virginia  merchants  provid- 
ing for  the  transportation  of  convicts  to  America.  The  prov- 
inces of  Virginia  and  Maryland  received  most  of  these  convicts, 
7 


82        ECONOMIC   HISTORY    OF    THE    UNITED    STATES 

although  they  were  not  unknown  elsewhere.  Many  of  the 
planters  preferred  their  services  to  those  of  the  bond  servants, 
as  their  terms  were  longer  and  their  rights  fewer. 

It  is  impossible  to  state  the  proportion  of  laborers  belonging 
to  the  two  classes,  but  the  indented  servants  were  undoubtedly 
in  the  majority.  Fifteen  hundred  a  year  is  the  estimate  of 
Berkeley  for  Virginia  in  1664;  seventeen  years  later,  it  was 
stated  that  ten  thousand  persons  were  annually  spirited  away 
from  Great  Britain  by  kidnappers.  In  this  same  year  there 
were  in  Virginia  six  thousand  servants  as  against  two  thousand 
slaves. 

79.  Treatment  of  servants.  —  The  treatment  of  servants 
was  as  various  as  the  character  of  the  masters.  At  first,  a 
sort  of  good  fellowship  seems  to  have  existed  between  masters 
and  men,  but  as  the  numbers  became  greater  a  mass  of  legis- 
lation grew  up  to  regulate  their  relations.  The  general  con- 
dition of  the  bond  servants  was  certainly  a  hard  one,  as  is 
,  shown  by  the  character  of  the  laws  to  protect  them.  No 
^servant  could  be  sold  out  of  the  province  in  which  he  agreed 
to  serve,  without  his  consent ;  he  must  be  furnished  with  suffi- 
cient and  wholesome  food,  clothing,  and  lodging  —  it  appeared 
that  the  food  allowed  was  often  a  coarse  diet  of  Indian  meal 
and  water  sweetened  with  molasses,  w^hile  lodging  and  clothing 
w^ere  poor  and  insufficient.  Finally,  the  law  provided  that  if 
a  servant  fell  ill  during  his  service,  he  must  be  cared  for;  the 
sick  servant  was  often  neglected  lest  the  doctor's  charges 
should  exceed,  the  value  of  his  remaining  service.  The  servant 
was  also  protected  against  unjust  cruelty  and  bodily  maiming; 
it  must  be  remembered,  however,  that  this  was  an  age  of  flog- 
ging, and  corporal  punishment  was  meted  out  to  soldiers  and 
sailors,  criminals,  and  children  as  well  as  servants. 
\j  On  the  other  hand,  the  interests  of  the  master  who  had 
invested  his  capital  in  servants  were  even  more  carefully  pro- 
tected. The  great  danger  to  which  he  was  exposed  was  the 
loss  of  runaway  servants,  who  fled  to  escape  service  or  were 
tempted  away  with  higher  wages  by  rival  employers.     Both 


THE    SYSTEMS    OF    LABOR  83 

the  runaway  and  those  who  harbored  him  were  punished  by 
severe  penahies. 

80.  Advantages  of  white  servitude.  —  In  the  early  colonial 
days  when  labor  conditions  were  so  unsettled  and  labor  scarce, 
certain  advantages  doubtless  existed  in  a  system  of  servitude 
for  white  servants.  The  long  terms  of  service  with  contract 
labor  introduced  an  element  of  certaint3%  which  was  very 
important  for  those  undertaking  large  and  rather  hazardous 
enterprises  in  a  new  country.  It  had  generally  the  effect  oT  an 
industrial  or  agricultural  apprenticeship,  and  provided  for  the 
development  of  a  class  of  small  independent  proprietors. 
Until  well  into  the  eighteenth  century,  when  it  was  gradually 
supplanted  by  the  system  of  slavery,  it  furnished  the  larger 
part  of  the  labor  supply  of  Virginia,  Maryland,  and  of  Penn- 
sylvania. On  the  other  hand,  it  must  be  said  that  the  moral 
influence  of  the  system  was  bad;  the  immorality  of  the  women 
servants  was  a  subject  of  constant  complaint  and  legislation,' 
w^hile  the  system  of  kidnapping  and  sale  of  the  labor  of  young 
boys,  as  well  as  the  abuse  of  power  by  harsh  masters,  had  a 
harmful  effect. 

81.  The  early  slave-trade.  —  More  important  and  far- 
reaching  in  its  effects  than  the  institution  of  white  servitude 
was  the  introduction  of  negro  slavery  into  North  America. 
Slavery  and  the  slave-trade  have  existed  ever  since  a  settled 
life  made  the  compulsory  service  of  captives  more  desirable 
than  their  exterminatiodtT  The  gradual  progress  of  civiliza- 
tion had,  however,  led  to  a  diminution  of  the  enslavement  of 
Christian  peoples,  and  would  doubtless  soon  have  completely 
abolished  it  had  not  America  been  discovered.  Negro  slavery 
had  long  existed  in  'Africa,  and  for  fifty  years  before  the  dis- 
covery of  America  a  regular  traffic  in  slaves  had  been  carried 
on  by  the  Portuguese  between  Europe  and  Africa.  There  was, 
however,  no  place  for  slaves  in  Europe,  except  in  the  domestic 
service  of  the  wealthy,  but  in  the  New  World  there  was  opened 
a  new  opportunity  for  then-  disposal  and  a  new  field  for  their 
labor. 


M 


84        ECONOMIC   HISTORY    OF    THE    UNITED   STATES 

82.  Introduction  of  slavery  into  America.  —  When  Spanish 
slave-holders  emigrated  to  the  West  Indies,  they  brought  their 
negro  slaves  with  them,  and  while  at  first  these  were  limited 
to  those  instructed  in  the  Christian  religion,  the  development 
of  sugar  growing  and  the  need  of  labor  soon  broke  down  this 
restriction.  The  native  Indians,  too,  were  enslaved,  but 
proved  ill  adapted  to  the  hard  labors  required  by  their  severe 
task-masters.  At  first  the  slave-trade  was  carried  on  by  the 
Portuguese  and  Spanish,  but  later  the  Dutch  and  English 
(1562)  engaged  in  the  traffic.  Thus  for  a  century  prior  to  the 
settlement  of  the  Jamestown  colony  slavery  had  existed  in  the 
West  Indies  and  a  regular  traffic  in  ^aves  had  developed  be- 
tween the  islands  of  North  America  and  Africa.  It  was  very 
naturally  introduced  into  the  English  colonies  on  the  continent 
from  the  West  Indies;  later  a  direct  traffic  with  Africa  sprang 

P- 

In  1619  a  Dutch  privateer  landed  twenty  negroes  at  James- 
town; the  number  increased  but  slowly,  however,  and  in  1671 
there  were  only  two  thousand  slaves  in  Virginia.  At  first 
most  of  the  slaves  were  supplied  by  the  Royal  African  Com- 
pany of  England,  but  after  1688  the  trade  was  thrown  open, 
and  many  New  England  merchants  engaged  in  the  traffic. 
The  first  ship-load  brought  into  i\rassachusetts  was  indeed 
returned  at  public  expense,  but  as  the  W^est  Indian  trade 
increased  in  volume  and  importance  the  early  scruples  were 
overcome  by  the  profits  secured.  During  the  eighteenth 
century  a  three-cornered  trade  was  developed  by  NeAv  England, 
by  means  of  which  molasses  was  brought  from  the  West  Indies 
to  New  England  where  it  was  manufactured  into  rum;  this 
was  taken  to  Africa  and  exchanged  for  slaves,  who  were  sold 
in  the  West  Indies  or  the  southern  colonies. 

It  is  difficult  to  ascertain  even  approximately  the  number 
of  negroes  whom  the  slave-traders  carried  off  from  Africa  to 
the  New  World.  At  the  beginning  of  the  eighteenth  century 
the  total  number  carried  each  year  to  all  the  colonies  by  British 
vessels  was  estimated  at  25,000;  from  1713  to  1753  it  ranged 


THE    SYSTEMS    OF    LABOR  85 

between  15,000  and  20,000.  In  1771  almost  two  hundred 
British  vessels  were  engaged  in  the  traffic,  carrying  annually 
47,000  slaves  from  Africa.  The  number  of  Africans  shipped 
by  all  nations  was  estimated  at  97,000  in  176S.  Only  a  small 
part  of  these  found  their  way  to  the  thirteen  English 
colonies. 

83.  Distribution  of  slavery.  —  Slavery  existed  in  all  the 
colonies,  but  to  a  very  different  degree  in  different  sections. 
In  Xew^  England  it  had  obtained  the  smallest  foothold  and  was 
disappearing,  not  so  much  because  of  a  moral  sentiment  against 
it  as  because,  owing  to  the  varied  industrial  development  of 
that  section,  it  was  economically  unprofitable.  The  Quakers 
of  Pennsylvania  were  opposed  to  slavery,  but  in  New  York 
and  New  Jersey  from  eight  to  ten  per  cent,  of  the  population 
was  composed  of  slaves,  who  were  treated  with  great  leniency. 
South  of  Mason  and  Dixon's  line  the  situation  was  quite  differ- 
ent. Of  the  four  hundred  thousand  slaves  in  the  colonies  in 
1760,  three  fourths  of  them  lived  in  the  South;  the  proportion 
in  the  different  colonies  varied  from  thirty  per  cent,  of  the 
population  in  Maryland  and  forty  per  cent,  in  Virginia,  to  sixty 
per  cent,  in  vSouth  Carolina. 

In  the  tobacco  colonies  the  treatment  of  the  slaves  was 
more  patriarchal  in  character;  but  in  the  rice  fields  of  South 
Carolina  the  worst  excesses  were  found.  Here  the  pestilential 
heat  of  the  swamps,  which  drove  the  planters  for  relief  to  the 
seashore,  proved  fatal  to  the  strongest  negroes,  who  were 
forced  to  work  at  the  severest  labor  under  brutal  overseers. 
It  was  found  to  be  more  profitable  to  work  the  slaves  until 
they  were  worn  out  and  then  get  fresh  supplies  rather  than  to 
spare  them;  the  new  slaves  were  usually  secured  direct  from 
Africa  and  were  consequently  less  tractable  than  the  American- 
born  negroes  of  Virginia.  The  constant  fear  of  uprisings, 
owing  to  the  numerical  superiority  of  the  slaves,  and  their 
propensity  to  run  away,  led  to  the  harshest  legislation  against 
them.  Herded  together  in  gangs,  with  few  women  and  no 
home  life,  they  showed  slavery  at  its  worst. 


\ 


86        ECONOMIC   HISTORY    OF    THE    UNITED    STATES 

84.  The  attitude  toward  slavery.  —  The  colonists  were  at 
first  opposed  to  the  introduction  of  slavery  and  various  acts 
were  passed,  in  ^lassachusetts  and  Mrginia.  in  Providence  and 
Georgia,  forbidding  or  restricting  it.  Among  the  English, 
however,  by  whom  the  slave-trade  had  already  long  been 
carried  on  with  the  West  Indies,  there  were  no  such  scruples. 
About  1663  a  British  Committee  on  Foreign  Plantations  de- 
clared that  ''  black  slaves  are  the  most  useful  appurtenances 
of  a  plantation."  Seventy  3^ears  later  the  Lord  Commis- 
sioners of  Trade  stated  that  "  the  colonies  could  not  possibly 
subsist  "  without  an  adequate  supply  of  slaves.  Laws  passed 
in  the  colonies  to  restrict  the  slave-trade  were  generally  disal- 
lowed by  the  crown,  and  royal  governors  were  warned  that 
the  colonists  would  not  be  permitted  to  '^  discourage  a  traffic 
/  so  beneficial  to  the  nation."  The  first  effect  of  the  introduc- 
\ltion  of  servile  labor  indeed  was  to  aid  in  the  rapid  clearing  of 
the  land  and  the  production  of  new  wealth.  Without  the 
S3^stem  of  slavery  and  the  sister  institution  of  white  servitude, 
it  may  be  said  that  the  development  of  the  South  would  have 
been  greatly  retarded  and  very  different  in  kind.  Gradually, 
as  it  was  seen  to  be  profitable,  the  objections  of  the  colonists 
died  away,  and  there  was  little  scruple  about  owning  slaves 
or  engaging  in  the  slave-trade. 

SUGGESTIVE  TOPICS   AND   QUESTIONS.     CHAPTER  VI 

1.  What  is  said  in  the  Constitution  about  involuntary  servitude? 
Was  this  aimed  against  the  colonial  practices? 

2  .  It  has  been  said  that  the  institution  of  human  slavery  was  the 
greatest  advance  ever  made  in  civilization.     Criticise  this  statement. 

3.  What  nation  do  you  think  was  responsible  for  slavery  in  the 
colonies?     [Bruce,  II,  chap.  11;  Weeden,  II,  chap.  12.] 

4.  What  was  the  "middle  passage"  in  the  slave  trade?  Why  so 
called?  Describe  its  horrors.  [McMaster,  II,  15;  Weeden,  II,  chap.  12; 
Abbot,  chap.  3;  John  Spear,  The  African  Slave  Trade.] 

5.  Did  slavery  spread  rapidly  or  widely  in  the  colonies?  [Johnson, 
Great  Events,  XI,  81-92.] 

6.  Does  slavery  exist  anywhere  in  the  world  to-day?  [Encycl.  Brit., 
art.  Slavery.] 


THE   SYSTEMS    OF    LABOR  87 

7.  Is  slavery  necessarj'?  Is  it  necessary  that  there  should  l)e  domes- 
tic servants?  AVould  society  be  better  or  worse  off  if  there  were  none? 
[Schaeffle,  Quintessence  of  Sociahsm,  111-112.] 

8.  Was  there  a  considerable  number  of  domestic  servants  in  the 
colonies?     Why?     [Salmon,  Domestic  Service,  chap.  3.] 

9.  What  is  ''coohe  labor,"  and  where  is  it  used?  Is  this  any  more 
excusable  than  slavery? 

10.  Were  there  any  tramps  in  the  colonies?  Why  are  there  any 
to-day  in  the  United  States?    [A.  G.  Warner.  American  Charities,  chap.  8.] 

11.  How  was  the  scarcity  of  khor  made  good  in  Australia?  [F.  H. 
Wines,  Punishment  and  Reformation,  162-171;  E.  F.  DuCane,  The  Punish- 
ment and  Prevention  of  Crime,  chap.  5.] 

12.  What  objections  are  there  to  sending  criminals  to  penal  colonies? 
[As  above.] 

13.  Was  the  practice  of  "binding  out"  the  children  placed  in  poor- 
houses  like  that  of  indenting  servants? 

14.  Has  the  lot  of  the  servant  improved  in  the  last  two  hundred 
years?     Is  it  better  here  than  in  Europe?     Why? 

SELECTED   REFERENCES.     CHAPTER  VI 

**Ballagh:  White  Servitude  in  the  Colony  of  Virginia. 
*Bancroft:  History  of  the  United  States,  I,  132-178. 
**Bruce:    Economic  History  of  Virginia,  II,  chaps.  9,  10,  11. 
*Eggleston:  Social   Conditions   in   the   Colonies.     In  Century  Magazine, 

VI,  848. 
*Lalor:  Cyclopedia  of  Political  Science,  art.  "Slavery." 
**Salmon:  Domestic  Service,  chap.  3. 

Brackett:  Slavery  and  Servitude  in  the  Colony  of  North  Carohna. 
Butler:  British  Convicts  shipped  to  American  Colonies.     In  Amer.  Hist. 

Review,  II,  12. 
Edwards:  History  of  the  West  Indies,  book  IV,  chaps.  2-5. 
Geiser:  Redemptioners  and  Indented  Servants  in  Pennsylvania. 
Weeden:  Economic  and  Social  History  of  New  England,  I,  83-87,  520-522. 
Wilson:  Rise  and  Fall  of  the  Slave  Power  in  America,  I,  chap.  1. 


CHAPTER   VII 


POPULATION   AND   COMMUNICATION 

85.  The  growth  of  population.  — \Before  closing  this  period, 
it  will  be  well  to  survey  briefly  the  growth  of  the  population 
and  the  extent  of  inter-colonial  communication,  and  to  note 
their  effect  on  the  economic  development  of  the  colonies. 
During  the  seventeenth  century  the  population  of  the  English 
colonies  in  North  America,  after  the  first  influx  in  1630-40, 
grew  but  slowly.  By  1640  there  were  only  25,000  whites  in 
British  North  America,  of  whom  sixty  percent,  were  in  New 
England  and  most  of  the  rdst  in  Virginia.  In  1660  this  number 
had  increased  to  80,000,  tlie  largest  gains  having  been  made 
in  Virginia  and  Maryland,  which  now  had  one  half  of  the  entire 
population.  P>om  this  time  on  the  middle  colonies  began  to 
increase  in  importance,  and! in  1690  had  about  one  fifth  of  the 
population  of  200,000.  A  [round  half  million  seems  to  have 
been  reached,  according  to  Bancroft,  in  1721,  and  a  million  in 
1743;  by  1770  the  two  milli  m  mark  had  been  passed. 

It  is  impossible  to  say  how  much  of  this  increase  was  due 
to  immigration  and  how  mu^h  to  natural  increase,  but  in  view 
of  the  dangers  and  difficulties  of  emigration,  it  is  probable  that 
after  the  first  settlements  the  increase  was  mainly  natural. 
Franklin,  when  he  estimated  in  1751  that  there  were  "  near  a 
million  souls  "  in  the  colonics,  thought  that  scarce  80,000  had 
been  brought  over  by  sea.  *  subsistence  was  cheap  so  that  there 
was  no  check  upon  the  rapid  increase  of  the  population,  which 
doubled  about  every  twenty-three  years.  The  majority  of 
this  population  was  of  English  stock,  but  even  where  the 
elements  were  diverse  there  was  a  steady  and  successful  pres- 
sure upon  the  succeeding  generations  to  make  Englishmen  of 
them.     In  1775   Bancoft  speaks  of  the  colonies  as  inhabited 

88 


POPULATION    AND    COMMUNICATION  89 

by  persons  only  "  one  fifth  of  whom  had  for  mother-tongue 
some  other  language  than  English."  In  New  England,  where 
the  population  was  most  homogeneous,  it  was  computed  that 
at  the  time  of  the  Revolution  ninety-eight  per  cent,  of  the 
population  were  Englishmen  or  of  unmixed  English  descent. 

86.  Communication  and  transportation.  —  During  nearly  all 
the  colonial  period  the  majority  of  the  colonists  lived  within 
reach  of  navigable  water;  separated  by  dense  forests  and  tribes 
of  hostile  Indians,  they  found  this  the  safest  and  easiest  high- 
way. With  the  light  Indian  birch-bark  canoe  it  w^as  possible 
to  penetrate  far  inland  on  the  interior  streams.  To  pass  the 
mountains,  however,  it  w^as  necessary  to  cross  from  the  rivers 
flowing  into  the  Atlantic  to  those  emptying  into  the  Mississippi. 
The  portage  thus  became  an  object  of  the  greatest  interest  and 
value  to  the  early  colonist  and  fur-trader.  Forts  w^ere  early 
established  on  the  important  portages,  which  were  always  the 
low^est  and  easiest  ways  over  the  watersheds.  More  recently  roads 
and  railways  have  followed  the  same  lines,  and  the  early  Indian 
portages  are  now  marked  in  many  places  by  populous  cities. 

Most  of  the  trade  betw^een  the  colonies  was  carried 
on  by  sea.  Convenient  harbors  were  numerous,  and  sailing 
vessels  plied  between  the  New  England  towns  and  those  of  the 
Middle  and  Southern  colonies,  and  even  with  the  distant  West 
Indies.  The  long  stretch  of  sheltered  w^ater  in  Long  Island 
Sound  greatly  favored  the  coastwise  trade.  All  the  important 
cities  of  colonial  times  were  seaports,  as  Boston,  Newport,  New 
York,  Philadelphia,  Baltimore,  Charleston,  and  Savannah. 
Although  the  excellence  of  the  water  communication  un- 
doubtedly delayed  the  building  of  improved  roads,  it  must  be 
regarded  as  a  great  economic  blessing  to  the  struggling  colo- 
nists, as  it  saved  them  much  wearisome  labor. 

87.  Colonial  roads.  —  As  the  population  pushed  inland, 
other  means  of  communication  than  those  by  water  l)ecame 
necessary,  and  the  Indian  trails  were  used,  being  generally 
widened  into  bridle  paths  or  roads  for  the  use  of  wagons.  Up 
to  the  time  of  the  Revolution  the  roads  were  very  poor,  being 


POPULATION    AND    COMMUNICATION  91 

constructed  without  system  by  the  different  locaUties;  although 
in  Massachusetts  the  General  Court  in  1639  had  ordered  each 
town  to  construct  a  highw^ay  to  connect  with  that  of  the  ad- 
joining town.  Few  bridges  existed  in  the  colonies,  and  the 
shallower  rivers  had  to  be  forded,  while  the  broader  or  deeper 
ones  were  crossed  by  means  of  ferries.  The  cost  of  trans- 
portation was  enormous,  and  usually  prohibitive  beyond  100 
or  150  miles:  the  charge  for  hauling  a  cord  of  wood  twenty 
miles  was  $3,  for  hauling  a  barrel  of  flour  one  hundred  and 
fifty  miles  it  was  $5.  Communication  was  infrequent;  the  first 
stage  between  New  York  and  Philadelphia  was  not  established^ 
until   1756,  and  the  trip  took  three  days.     Communities  were 


Stage  Coach 
The  stage  coach  did  not  reach  its  highest  development  until  after  the 
roads  had  been  improved  and  turnpikes  built.     The  first  stage  coach 
which  ran  directly  from  New  York  to  Philadelphia — ^"the  flying 
machine"  — ■  was  started  only  a  few  years  before  the  Revolution. 

consequently  isolated  from  one  another,  and  yet  the  effect  of  the 
Appalachian  t)arrier  to  the  west  was  to  cause  a  denser  settle- 
ment of  the  Atlantic  seaboard.  In  1700,  we  are  told  by  Shaler, 
"  it  was  possible  to  ride  from  Portland,  Maine,  to  Southern 
Virginia,  sleeping  each  night  at  some  considerable  village." 

As  might  be  expected,  the  postal  facilities  in  the  colonies  were 
of  the  most  primitive  character;  letters  and  packages  were  gener- 
ally carried  by  private  messengers  at  high  rates.  An  important 
advance  was  made  when  a  general  postal  system  was  inaugurated 
by  the  second  Continental  Congress  on  July  26,  1775.  Benja- 
min Franklin  was  placed  at  the  head,  and  a  line  of  posts  estab- 
lished from  Falmouth  in  New  England  to  Savannah,  Georgia. 


92 


ECONOMIC    HISTORY    OF    THE    UNITED    STATES 


This  was  gradually  extended  during  the  next  few  years  and  in 
1789  was  placed  under  the  control  of  the  postmaster  general. 

88.  Money  and  trade.  —  There  was  very  little  metallic 
money  in  the  colonies,  and  what  little  was  brought  over  by 
incoming  colonists  was  speedily  sent  back  to  pay  for  more 
valuable  forms  of  capital.     All  exchange  was  slow  and  cum- 


I 


■y-m 


1.   Three  ShiUings.    ^ 

ff  S  •:•;♦*•  O-a  $«  *  ».',«*■*  ^^J 


I. 


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4c)    -:  /v^: 


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r:^.#i^. 


m 


Massachusetts  Colonial  Currexcy 

Massachusetts,  together  with  the  other  colonies,  issued  h\S\s,  of  credit  for 
the  double  purpose  of  providing  a  medium  of  exchange  and  of  replenish- 
ing an  empty  treasury  without  the  necessity  of  resorting  to  taxation. 
There  were  large  over-issues  and  consequent  depreciation,  and  in  1742 
a  new  issue  was  authorized,  called  ''  new  tenor  "  bills,  in  which  the  "  old 
tenor"  bills  were  to  be  redeemed  at  the  rate  of  four  to  one.  This  is 
indicated  on  the  reverse  of  the  bill  shown.  After  a  mad  career  of  paper 
money  issues,  Massachusetts  finally  resumed  specie  payments  in  1750 
and  redeemed  the  outstanding  bills  in  silver. 


brous  and  business  dragged  heavily.  Direct  barter  was  largely 
resorted  to,  and  when  this  became  too  inconvenient  various 
commodities  were  used  as  money,  often  being  given  legal 
tender  quality,  such  as  tobacco,  rice,  corn,  beaver  skins,  wam- 


POPULATION   AND    COMMUNICATION  93 

pum,  and  other  articles.  Debts  were  settled,  taxes  collected, 
and  church  tithes  paid  in  these  commodities. 

To  meet  the  need  of  a  larger  circulating  medium  for  colonial 
exchanges  paper  money  was  early  issued  by  the  colonists; 
Massachusetts  was  the  first  to  resort  to  the  use  of  credit  money 
in  1690,  to' finance  an  expedition  against  the  French  in  Canada. 
Subsequently,  colony  after  colony  yielded  to  the  temptation 
and  issued  paper  money  for  various  purposes.  Numerous 
schemes  were  broached  for  establishing  private  banks  to  issue 
their  notes  upon  the  security  of  land  or  commodities.  As  the 
power  of  coining  money,  and  hence  of  issuing  paper  money, 
was  a  royal  prerogative,  these  acts  of  the  colonists  were  always 
regarded  with  jealousy  by  the  crown.  In  1751  Parliament 
forbade  the  issue  of  bills  of  credit  in  New  England,  and  thirteen 
years  later  extended  this  prohibition  to  the  remaining  colonies. 
The  quarrels  over  this  subject  between  colonial  legislatures 
and  royal  governors,  who,  acting  under  royal  instructions 
usually  disallowed  paper  money  issues,  later  formed  one  of 
the  important  though  little  emphasized  causes  of  disaffection 
between  the  colonies  and  the  mother-country. 

89.  Social  institutions.  —  The  colonists  were  for  the  most 
part  an  energetic,  thrift}',  high-minded,  simple-hearted  people. 
There  were  considerable  divergencies  in  the  different  sections 
of  the  country,  corresponding  to  differences  in  race,  occupation, 
and  environment.  In  New  England,  the  population  was  re- 
markably homogeneous;  persevering  industry,  in  the  face  of 
an  inhospitable  environment,  had  secured  for  them  general 
well-being,  unmarked  by  either  wealth  or  poverty.  There 
was  essential  equality  of  condition,  though  the  ministry  and 
other  professions  constituted  a  virtual  aristocracy  of  learning 
and  birth.  The  population  of  the  middle  colonies  was  of  all 
the  sections  the  most  heterogeneous,  being  composed  of  several 
nationalities.  The  occupations  and  general  well-being  were 
similar  to  those  of  New^  England,  but  the  disposition  of  the 
people  was  not  so  stern  and  they  were  more  given  to  social 
amusements.     A  great  contrast  to  the  democratic  society  of 


94        ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

the  other  sections  was  found  in  the  southern  colonies,  where 
the  population  was  divided  into  clearly  marked  social  classes, 
at  the  head  of  which  stood  the  large  plant  at  ion  owners  and  at  the 
foot  the  negro  slaves.  The  character  of  southern  agriculture 
and  the  existence  of  slavery  dispersed  the  population  and  pre- 
vented the  growth  of  towns,  so  that  there  was  little  intercourse. 
In  general  the  life  in  the  colonies  was  simple  and  often  rude, 
with  few  extremes  of  poverty  or  wealth,  little  in  the  way  of 
luxuries,  l^ut  an  assured  subsistence  as  the  reward  of  industry. 

90.  Summary :  Material  progress.  —  The  colonial  period 
shows  a  rapid  development  toward  economic  independence  on 
the  part  of  the  inhabitants  of  the  different  colonies,  and  an 
equally  well-marked  tendency  toward  sectional  isolation. 
Bringing  with  them  the  existing  tools  and  institutions  of 
government  of  the  Old  World  the  colonists  were  able  to  wrest 
a  livelihood  from  the  rich  resources  of  their  new  environment 
from  the  beginning.  The  aborigines,  who  had  never  passed 
beyond  the  stage  of  barbarism,  were  compelled  to  yield  step  by 
step  to  the  superior  culture  and  westward  march  of  the  pioneer. 
The  combination  of  wonderful  natural  resources  and  of  high 
qualities  in  the  men  who  essayed  the  task  of  subjugating  the 
new  world  resulted  in  steady  progress. 

Naturally,  in  a  new  country,  the  extractive  industries  were 
first  developed.  Agriculture  was  the  most  important  single 
industry,  and  under  the  new  conditions  it  grew  along  original 
lines,  different  from  those  which  had  developed  under  the 
feudal  institutions  of  Europe.  Other  industries  too  sprang 
up  in  response  to  the  economic  needs  of  the  colonists  or  the 
artificial  regulations  of  the  mother-country.  In  general  the 
typical  colonial  community  was  comparatively  isolated  and 
economically  self-sufficient,  and  had  little  intercourse  with  the 
rest  of  the  world.  By  the  middle  of  the  eighteenth  century 
great  progress  had  been  made  toward  settling  and  cultivating 
the  territory  on  the  Atlantic  seaboard,  but  the  American 
colonies  were  still  in  a  primitive  agricultural  stage;  such  manu- 
factures as  were  needed  were  generally  made  within  the  home. 


POPULATION    AND    COMMUNICATION  95 

91.  Summary:  Social  development.  —  Such  conditions  fos- 
tered the  growth  of  free  institutions,  and  the  constant  struggle 
with  nature  developed' strength  of  character  and  of  body.  In 
spite  of  certain  social  distinctions  which  the  colonists  brought 
over  with  them  from  an  older  civilization  they  were  forced 
intJ^a  democratic  mold 'by  the  essential  equality  of  condi- 
tions in  a  primitive  society.  Equality  and  liberty  were  the 
ideals  of  the  typical  American  colonist,  while  the  abundance 
of  free  land  led  him  to  regard  private  property  in  land  as 
hardly  less  sacred  than  his  other  rights.  At  one  point,  how- 
ever, these  ideals  yielded  to  necessity  —  or  greed.  There  was 
great  need  in  all  the  colonies  of  labor,  and  in  order  to  secure 
the  desired  supply  slavery  was  early  introduced.  New  Eng- 
land and  the  South  shared  in  the  gains  from  this  nefarious 
traffic;  for  a  while  their  interests  seemed  identical.  Subse- 
quently, the  diverse  economic,  social,  and  political  ideals 
which  grew  out  of  the  contrasting  labor  systems  of  North  and 
South  led  to  complete  estrangement  of  these  sections.  For  the 
time  being,  however,  sectional  differences  were  harmonized  in 
a  common  animosity  against  the  mother-country,  whose' restric- 
tive colonial  polic/l3egan  now  to  hinder  the  natural  economic 
development  of  the  colonies.  The  attempt  on  the  part  of  Eng- 
land to  enforce  these  restrictions  led  naturally  to  resistance 
from  the  colonists,  and  resulted  inevitably  in  revolution. 

SUGGESTIVE  TOPICS  AND  QUESTIONS.     CHAPTER  VII 

1.  What  conclusions  did  Malthus  reach  from  a  study  of  the  growth 
of  population  in  the  American  colonies?  [T.  R.  Malthus,  The  Principle 
of  Population,  chap.  6.] 

2.  Shaler  says  the  Appalachian  Mountains  presented  to  the  early 
colonists  "a  barrier  almost  as  impassable  as  the  Alps."  What  effect  did 
this  have  on  the  settlement  of  the  colonies,  on  trade,  and  on  westward 
expansion?     [Semple,  Amer.  Hist,  and  its  Geographic  Conditions,  chap.  3]. 

3.  Were  there  any  considerable  settlements  during  the  colonial  period 
that  were  not  accessible  by  ^vater?     Where? 

4.  Do  you  know  of  any  communities  in  the  United  States  to-day 
which  are  without  railroads  or  trolley  lines?  To  what  extent  does  ex- 
change of  goods  or  social  intercourse  take  place? 


96        ECONOMIC   HISTORY    OF    THE    UNITED   STATES 

5.  How  could  one  go  by  water  inland  (with  portages)  from  the  Atlan- 
tic to  the  Gulf  of  Mexico?  to  the  Pacific?  [Farrand,  Basis  of  Amer. 
Hist.,  chap.  2.] 

6.  Did  the  comparative  isolation  of  the  colonies  exercise  any  effect 
on  the  growth  of  ideas  of  pohtical  independence? 

7.  Why  were  the  colonists  so  eager  to  issue  paper  money?  Why  did 
the  English  government  object?  [White,  Money  and  Banking,  103-114; 
Bullock,  Mon.  Hist,  of  U.  S.,  part  1,  chaps.  3,  4;  Dewey,  Fin.  Hist,  of  U.  S., 
18-30;  Weeden,  II,  473-491.] 

8.  Give  the  history  of  the  Massachusetts  ''pine-tree"  shilhng.  [Davis, 
Currency  and  Banking  in  Mass.;  Eggleston,  Commerce  in  the  Colonies.] 

9.  Describe  the  life  in  some  colonial  college  before  the  Revolution. 
[Hart,  Hist,  told  by  Contemp.,  II,  255-7,  266-275.] 

10.  Was  there  any  considerable  development  of  literature  or  art  in 
the  colonies?  Explain  your  answer.  [Bristed,  Amer.  and  Her  Resources, 
chap.  6;  Greene,  Provincial  America,  chap.  18;  Wilson,  Hist,  of  Amer. 
People,  III,  83.] 

11.  Describe  the  social  life,  diet,  dress,  and  domestic  economy  of  the 
early  colonists.  [Lodge,  English  Col.  in  Amer.,  see  Index;  A.  M.  Earle, 
Home  Life  in  Col.  Days;  Scudder,  Men  and  Manners;  Hart,  Hist,  told  by 
Contemp.,  II,  chap.  12.] 

12.  Is  the  population  increasing  as  rapidly  in  the  United  States  to-day 
as  in  colonial  times?  Is  there  any  difference  in  the  rate  of  increase  in 
different  parts  of  the  country? 

13.  Could  a  country  dispense  more  easily  with  money  or  with 
roads? 

SELECTED  REFERENCES.     CHAPTER    VH 

**Bancroft:  History  of  the  United  States,  I,  475-589;  II,  24-46. 

**Bruce:  Economic  Histoiy  of  Virginia,  I,  chap.  19. 

*Hart:  History  told  by  Contemporaries,  III,  chaps.  2,  3. 

**Lodge:  English  Colonies  in  America. 

*Weeden:  Economic  and  Social  History  of  Xe^\  England,  II,  chaps.  12,  15, 

21. 
**White:  Money  and  Banking,  120-148,  248-258. 

Coffin:  Old  Times  in  the  Colonies. 

Douglass:  A  Discourse  concerning  the  Currencies  of  the  British  Planta- 
tions in  America. 
Doyle:  English  Colonies,  I,  381-395;  III,  377-404. 
de  Tocqueville:  Democracy  in  America,  chaps.  2,  3. 
Tyne:  The  American  Revolution,  chap.  15. 
McMaster:  History  of  the  People  of  the  United  States,  I,  chap.  1. 


PART   II 

STRUGGLE   FOR   COMMERCIAL  AND   ECONOMIC 
INDEPENDENCE     (1763-1808) 

CHAPTER   VIII 
AMERICAN  COMMERCE  AND  COMMERCIAL  POLICY 

92.  English  policy  of  taxation.  —  Until  1763,  as  has  been 
pointed  out,  the  commercial  restrictions  imposed  by  England 
upon  the  colonies  had  been  largely  evaded  or  unenforced.  By 
the  conclusion  of  the  Seven  Years'  War,  in  1763,  the  fear  of 
hostilities  from  the  French  had  been  removed  and  free  scope 
given  the  colonists  to  devote  themselves  to  material  expansion, 
an  opportunity  of  which  they  had  been  quick  to  avail  them- 
selves. The  industries  of  the  country  had  rapidly  developed 
and  an  enforcement  of  the  earlier  restrictive  legislation  would 
have  entailed  great  hardship. 

Just  at  this  time,  however,  changes  were  taking  place  in 
England  which  led  to  the  insistence  upon  a  stricter  colonial 
policy.  The  beginnings  of  the  industrial  revolution  made 
English  manufacturers  more  eager  than  ever  to  monopolize 
colonial  trade  and  stifle  competition.  It  seemed  only  fair, 
moreover,  that  the  expenses  of  the  war  with  France,  waged 
largely  because  of  the  colonists,  and  of  the  frontier  conflicts 
with  the  Indians,  should  be  borne,  in  part  at  least,  by  those 
benefited.  Accordingly,  a  more  vigorous  policy  of  colonial 
taxation  began  to  be  enforced  by  successive  English  ministries. 

93.  Imposts  in  the  colonies.  —  Under  the  leadership  of 
Grenville,  the  prime-minister  at  that  time.  Parliament  passed 
the  Sugar  Act  of  April,  1764,  by  which  duties  were  laid  upon 
indigo,  coffee^vines,  sillvs^and  other  East  India  and  Oriental 
goods,   calicoes,   etc.,    imported    into   the   American   colonies, 

8  97 


98 


ECONOMIC    HISTORY    OF    THE    UNITED    STATES 


and  the  existing  duties  iipon  sugar  andjnolassesr-^^hich  had 
previously  been  prohibitory,  were  lowered  and  placed  upon  a 
revenue  basis.  These  measures  affected  New  England  espe- 
cially and  roused  the  utmost  discontent 
in  that  section.  Moreover,  the  laws  were 
enforced  most  rigidly,  even  the  naval 
vessels  being  used  as  revenue  cutters. 
A  year  later,  in  March,  1765,  the  Stamp 
Act  was  passed,  by  which  it  was  designed 
to  raise  money  from  the  colonists  for 
the  maintenance  of  the  soldiers  in  the 
colonies.  Although  this  w^as  repealed  in 
the  following  year  because  of  the  oppo- 
sition it  aroused,  it  was  followed,  in 
1767,  by  the  so-called  Townshend  Acts, 
which  provided  among  other  things  for 
a  colonial  revenue  from  an  import  duty 
on  wine,  oil,  glass,  paper,  lead,  painters' 
colors,  and  tea,  imported  into  the  colonies. 
Owing  to  increasing  discontent  in  the 
colonies  and  to  their  complete  failure  as  a  revenue  measure 
the  Townshend  Acts  were  repealed  after  two  years,  with  the 
exception  of  the  duty  of  3d  a  pound  upon  tea,  which  was 
retained  as  a  proof  of  Parliament's  right  to  tax  the  colonists. 

94.  Non-importation  as  a  means  of  defense.  —  The  right  of 
England  to  regulate  the  commerce  of  the  colonies  had  not  been 
questioned  before  1763,  and  in  general  the  Navigation  and 
other  acts  had  been  acquiesced  in,  with  comparatively  little 
complaint,  by  the  colonists.  And  even  now  forcible  resistance 
or  armed  revolution  was  a  long  way  off»  At  first  the  colonists 
resorted  to  what  appeared  to  be  the  only  peaceful  method  of 
defense,  non-importation  agreements.  The  first  of  these  was 
entered  into  in  March,J.-7fi5,  by  the  merchants  of  New  York, 
Massachusetts,  Rhode  Island,  and  Pennsylvania.  They  agreed 
nnt_io  import  any  goods  from  Great  Britain;  to  countermand 
orders  already  given;  and  to  refuse  to  sell  British  goods  sent 


British  Tax  Stamp 
One  of  the  stamps  to  be 
used  on  legal  documents 
in  America  under  the 
Stamp  Act  of  1765,  by 
which  Parhament  calcu- 
lated to  raise  about 
£100,000  in  taxes  from 
the  colonists. 


AMERICAN    COMMERCE    AND    COMMERCIAL   POLICY 


99 


on  commission,  until  the  Stamp  Act  of  1765  was  repealed.  At 
the  same  time  the  people  generally  agreed  to  abstain  from  the 
use  of  goods  which  were  not  of  domestic  manufacture,  and  in  other 
ways  to  promote  domestic  manufactures  as  far  as  possible. 

95.  Non-importation  associations.  —  The  first  attempt  was 
so  successful  that  in  1769  a  second  agreement  was  made  by  the 
merchants  and  people  in  nine  of  the  colonies  to  ''boycott  '" 
English  goods.  Their  purpose  was  to  exert  a  pressure  upon 
English  exporting  merchants,  which  would  cause  them  to 
petition  for  the  repeal  of  the  objectionable  acts,  and  in  this  they 
were  successful.  Export ations  to  the  New  England  and  middle 
colonies  fell  off  almost  two  thirds;  those  to  the  southern  colonies, 
which  were  economically  more  dependent  upon  England,  re- 
mained almost  constant.     This  is  shown  in  the  following  table: 


Exported  from  Great  Britain  to 

1768 

1769 

New  England 

£430,807 
490,674 
441,830 

£223,696 
75,931 

Pennsylvania               

204.976 

Northern  Colonies 

Maryland  and  Virginia 

North  'in<l  Sonth  Carolina             .        ... 

£1,363,311 

£669,422 

300,925 

56,562 

£504,603 

£614,944 
327,084 

Georgia 

58.341 

Southern  Colonies    

£1,026,909 

£1,000,369 

Finally,  in  1774,jthe  first  Congress  unanimously  resolved 
that  after  Decembei^l  of' that  year  "there  should  be  no  im- 
portation into  British  America  from  Great  Britain  or  Ireland, 
or  from  any  other-  place,''  of  any  goods,  wares,  or  merchandise 
exported  from  Great  Britain  or  Ireland.  A  further  resolution 
was  later  passed  ''  that  from  and  after  September  10,  1775,  the 
exportation  of  all  merchandise  and  every  commodity  what- 
soever to  Great  Britain,  Ireland,  and  the  West  Indies  ought  to 


100      ECONOMIC   HISTORY    OF    THE    UNITED   STATES 

cease,  unless  the  grievances  of  America  are  redressed  before 
that  time  ";  exceptions  were  made  only  of  tobacco  and  rice  to 
secure  the  adherence  of  Virginia  and  South  Carolina.  Twelve 
of  the  thirteen  colonies  adopted  these  resolutions  and  they 
were  everywhere  carried  out  with  the  strictest  fidelity.  From 
the  large  importations  of  the  previous  year,  it  was  evident 
that  the  colonies  were  well  supplied  with  British  goods  for 
even  a  length}^  "  boycott."  Parliament  answered  these  reso- 
lutions by  forbidding  nine  of  the  colonies  to  import  any  but 
British  goods.  But  before  this  legislation  went  into  effect  the 
Revolution  had  begun.  The  non-importation  agreement  of 
the  colonies,  however,  remained  in  force  until  April  6,  1776, 
having  been  modified  the  previous  3^ear  to  admit  only  the 
importation  of  munitions  of  war.  The  boycott  against  Great 
Britain  was  of  course  maintained  throughout  the  Revolution. 

96.  Commerce  and  manufactures  during  the  Revolution.  — 
At  the  outbreak  of  the  war  the  colonies  were  practically  self- 
sustaining,  although  the  interruption  of  foreign  trade  had 
deprived  them  of  most  of  the  conveniences  and  luxuries.  Their 
industrial  isolation  during  the  war,  as  well  as  the  demand  of 
the  army  for  clothing,  arms,  etc.,  gave  a  decided  stimulus  to 
the  struggling  manufactures  of  the  colonies.  ]\lany  iron  works 
and  small  manufactories  were  called  into  existence,  and  in  some 
cases  were  given  special  encouragement  by  bounties  and  prizes. 

L  pon  the  declaration  of  peace  the  country  was  flooded  with 
British  goods.  In  1784  the  imports  from  England  amounted 
to  £3,679,000,  and  in  1785  to  about  £2,308,000;  while  in  the 
ten  years  previous  to  the  war  (1760-1770)  the  annual  average 
imports  had  been  only  £1,763,000.  On  the  other  hand  the 
exports  fell  off  somewhat,  from  £1,045,000  on  the  average  for 
the  ten  years  before  the  war  (1760-1770)  to  £749,000  for 
1784,  and  £894,000  for  1785.  The  effect  of  these  excessive 
importations  upon  the  industries  which  had  but  just  started  up 
during  the  war  was  immediate  and  disastrous;  as  they  were  not 
firmly  established,  they  were  l)eing  forced  out  of  existence. 

97.  Efforts  toward  freedom  of  trade.  —  In  1776,  as  stated 


AMERICAN    COMMERCE   AND    COMMERCIAL  POLICY     101 

above,  the  American  ports  were  thrown  open  as  far  as  possible 
to  FAiropean  trade,  though  British  warships  and  privateers  ren- 
dered such  trade  extremely  hazardous.  With  Great  Britain 
alone  was  intercourse  forbidden.  During  this  period  there 
were  no  duties  or  restrictions  upon  foreign  commerce  with 
other  nations  in  any  of  the  American  States,  except  Virginia. 
The  Revolution  was  primarily  a  struggle  for  freedom  of  com-  l^^^ 
merce;  and  consequently  there  was  no  desire  to  limit  foreign 
trade.  For  instance,  the  French  alliance  of  1778  provided 
for  our  commercial  relations  on  the  basis  of  the  "  most  perfect 
equality  and  reciprocity."  After  the  war,  accordingly,  an  <-^ 
effort  was  made  to  realize  general  free  trade  with  all  nations. 
It  was  believed  that  our  trade  was  so  import  an']  tb'the  nations 
of  Europe  that  they  would  consent  to  abolish  .their  restrictions 
upon  foreign  trade  in  our  favor  rather  thail,l(^€  it.  ;  Kor'i^\^sl;?  : 
the  desire  for  universal  free  trade  based  merely  upon  senti- 
ment; it  would  have  been  commercially  most  profitable. 

Up  to  this  time  the  nation  had  been  primarily  agricultural 
and  commercial,  and  there  w^as  little  thought  that  the  United 
States  would  ever  become  a  manufacturing  nation,  economi- 
cally self-sufficing.  Consequently,  freedom  of  trade  with  other 
nations  was  eagerly  sought  for  until  about  1784.  Indeed, 
Stanwood,  an  ardent  protectionist,  believes  that  had  the  Con- 
stitution been  drawn  up  in  1782,  "  it  is  not  unlikely  that  it 
would  have  contained  a  prohibition  of  all  laws  in  restraint  of 
trade,  foreign  or  domestic." 

98.   Failure  of   efforts.  —  The   only  countries   with   which 
Congress  was   able  to   make  treaties  guaranteeing  reciprocal ^^^^ 
commercial  privileges  w^ere  Prussia  and  Sweden;  France,  Hol- 
land, Spain,  and  Portugal  refused  to  accede  to  our  overtures. 
An  attempt  was  made  by  Jay  to  seci|HBftje  reciprocal  pro-j 
vision  from  England  in  the  treaty  oj  DeJ^^^l|'83,  but  unsu( 
cessfully.     Indeed,  after  the  defeH||^^B|Kort  to  seciy^ 
freedom  of  trade  between  the  UnJUiPBHfnd  the  British 
colonies.   Parliament   proceeded  t(|- exclude   American   vessels 
from  the  West  India  trade  by  admit  iiy  British-built  and 


d1- 


102      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 


manned  vessels  to  the  islands,  and  to  subject  American  ships  in 
other  British  ports  to  heavy  tonnage  dues.  The  loss  of  the  West 
India  trade  was  a  particularly  heavy  blow  to  the  United  States, 
for  even  from  early  colonial  times  it 
had  been  a  most  valuable  branch  of 
our  commerce.  Wheat,  corn,  and 
flour  had  been  exported  from  the  New 
England  and  middle  colonies  to  the 
West  Indies,  with  the  proceeds  from 
which,  in  bills  of  exchange,  goods  had 
been  purchased  from  ICngland.  As  the 
colonies  had  little  to  export  directly  to 
England,  without  this  trade  they  could 
not  have  paid  for  their  imports  from 
that  country;  in  1769  the  total  colonial 
trade  with  the  West  Indies  amounted  to 
£1,537,664.  The  economic  prosperity 
of  a  large  part  of  the  States  therefore 
still  depended  directly  upon  the  trade 
with  the  West  Indies.  Furthermore, 
even  in  direct  trade  with  Great  Britain  American  ships  were 
permitted  to  carry  goods  produced  only  in  the  particular  States 
of  which  their  owners  were  citizens.  As  only  one  fourth  of 
southern  shipping  was  owned  by  residents  of  that  section,  this 
was  almost  equivalent  to  forbidding  southern  exports  to  Great 
Britain  except  in  British  vessels  —  a  reenactment  of  the  old 
^    Navigation  laws. 

\j      99.   Retaliation  by  the  States.  —  It  seemed  as  if  the  only 

effective    method    of   securing    equal    trading    privileges    from 

I  Great   Britain  and  the  other  European  nations  would  be  to 

^^^^ engage   in   systematic    reprisals.     Owing   to   the   weakness   of 

^^■Congress  under  the  Articles  of  Confederation  such  action  was 

impossible  by  th6  central  government,  and,  although  power  to 

levy  taxes  and  regulate  commerce  was  repeatedly  asked  for  by 

^  Congress,   it   was   never  granted.     Until    1789,   therefore,   the 

/   States  undertook   to   regulate   commerce   and   by  retaliatory 


Wtli.iam  Pitt 
*^^irct 'Ea-r^  of  Ciiatham. 
He  was  a  steadfast  friend 
of  the  American  Colonies 
and  constantly  opposed 
oppressive  measures 
against  them.  Born  in 
1708,  died  in  1778. 


AMERICAN    COMMERCE    AND    COMMERCIAL   POLICY      lU.'i 

measures  to  secure  greater  freedom.  During  the  years  1780 
to  1788  Pennsylvania  enacted  fifteen  tariffs;  Virginia,  twelve; 
Massachusetts,  New  York,  and  Maryland,  each  seven;  Con- 
necticut, six;  and  the  other  States  a  smaller  number.  While 
those  in  the  southern  States  were  chiefly  for  the  purposes  of 
revenue,  the  tariffs  of  the  middle  and  New  England  States  were 
dictated  by  motives  of  retaliation  and  protection.  Discrim- 
inating tonnage  dues  and  import  duties  were  imposed  by  most 
of  the  colonies  upon  British  imports,  but  as  the  duties  varied 
all  the  way  from  five  to  one  hundred  per  cent.,  and  some  of  the 
States  admitted  such  goods  free  of  dut}',  British  goods  con- 
tinued to  flood  the  country  through  the^ree  or  cheapest  ports. 
It  must  be  remembered,,  however,  that  trade  with  England 
was,  as  it  always  had  been,  the  most  profitable  trade  for  the 
United  States.  To  make  matters  worse,  the  States  finally 
began  to  make  commercial  war  upon  each  other. 

100.  Federal  control  of  commerce.  —  It  had  now  become 
evident  that  even  if  reprisals  were  desirable,  it  was  impossible 
to  carry  them  out  so  long  as  each  State  controlled  its  own 
action  with  regard  to  foreign  commerce.  Unified  action  could 
never  be  secured  until  Congress  should  be  made  supreme  in 
foreign  relations.  Moreover,  the  mutual  jealousies  of  the  States 
were  daily  making  some  plan  of  central  control  more  neces- 
sary. At  the  same  time  American  industries  had  been  devel- 
oping and  a  growing  desire  for  protection  began  slowly  to 
replace  the  idea  of  retaliation.  The  growth  of  new  industries, 
it  was  thought,  would  lessen  our  industrial  dependence  upon  Eng- 
land, which  meanwhile  showed  no  signs  of  removing  its  com- 
mercial restrictions.  By  the  Constitution  of  1789,  accordingly,- 
the  control  over  foreign  commerce  was  vested  solely  in  Congress, 
thus  laying  the  foundation  for  a  unified  and  splendid  develop- 
ment.WThe  demand  for  protection  found  some  slight  expression 
in  the  tariff  act  of  the  same  year,  but  the  change  in  economic 
conditions  which  soon  occurred  led  to  a  shifting  of  inter- 
ests and  to  an  expansion  of  commerce  rather  than  manu- 
factures. 


I 


104      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

101.  The  Continental  wars  and  neutrality.  —  The  war  which 
broke  out  betw.een  England  and  France  in  1793,  and  spread 
until  it  finally  involved  all  the  nations  of  Europe,  made  Ameri- 
can merchants,  who  occupied  a  position  of  neutrality  through- 
out, the  principal  carriers  of  the  trade  between  the  warring 
nations  and  their  colonies.  But  under  the  prevailing  prin- 
ciples of  international  law%  the  rights  of  neutrals  were  but  little 
respected.  According  to  the  Rule  of  War  of  1756,  a  neutral 
could  not  enjoy  in  time  of  war  a  carrying-trade  which  was 
prohibited  to  it  in  time  of  peace.  Great  Britain  therefore 
proceeded  against  such  of  our  vessels  as  attempted  to  trade 
with  the  French  West  Indies,  which  had  previously  been  closed 
to  us.  As  trade  with  the  British  West  Indies  had  been 
prohibited  since  1783,  this  section  was  practically  closed  to 
legitimate  commerce.  Moreover,  provisions  were  then  con- 
sidered contraband  of  war,  and  both  the  French  and  British 
governments  ordered  the  capture  and  condemnation  of  neutral 
vessels  carrying  provisions  to  the  enemy's  ports. 

An  even  more  irritating  claim  of  Great  Britain  was  the  right  to 
impress  British  sailors  found  on  American  vessels  for  service  on 
their  men-of-war.  Jay's  treaty  between  the  United  States  and 
Great  Britain  did  not  settle  these  difficulties,  while  it  greatly  irri- 
tated France,  almost  to  the  point  of  war.  By  the  terms  of  the 
French  Alliance  of  1778,  we  had  agreed  to  make  common  cause 
with  France  against  Great  Britain  in  the  event  of  a  war.  That 
nation  was  greatly  offended  by  our  policy  of  neutrality,  openly 
insulted  our  government,  and  was  all  but  at  open  war  with  us 
from  1797  to  ISOO.  In  the  latter  year  the  treaty  of  1778  was 
finally  annulled  and  we  were  freed  from  foreign  entangle- 
ments. 

102.  The  harvest  from  neutrality.  —  In  spite  of  these  embar- 
rassments, the  carrying-trade  of  American  ship-owners,  showed 
an  enormous  expansion  during  the  period  from  1793  to  1801. 
Our  total  foreign  trade  increased  from  $48,000,000  in  1791  to 
$205,000,000  in  1801,  while  our  exports  increased  from  $19,- 
000,000  to  $94,000,000.     There  was  a  large  and  steady  demand 


AMERICAN    COMMERCE   AND    COMMERCIAL   POLICY     lOo 

for  agricultural  products  for  exportation  lo  ihe  belligerent 
countries,  and  the  prices  of  wheat,  corn,  and  meat  were  very 
high.  The  profits  from  the  production  and  freight  of  these 
goods  were  enormous. 

At  the  same  time  most  of  the  trade  between  the  belligerent 
nations  and  their  colonial  possessions  was  thrown  into  the  hands 
of  American  ship-owners.  The  products  of  the  French,  Spanish, 
and  Dutch  East  and  West  Indies  were  either  carried  directly 
to  Europe  or  were  first  shipped  to  the  United  States  and  then 
re-exported.  While  none  of  the  United  States  ports  lay  on  the 
direct  route  between  South  America  or  the  West  Indies  and 
Europe,  the  trade  winds  and  Gulf  Stream  made  the  roundal^out 
route  but  little  longer  in  point  of  time.  Furthermore,  by  calling 
at  an  American  port,  re-shipping  the  goods,  and  taking  out  fresh 
papers,  the  danger  from  English  privateers  was  removed;  draw- 
backs of  the  import  duties  were  of  course  allowed  on  all  re-exports 
from  the  United  States.  In  1801  over  one  half  of  our  exports 
were  re-exports.  As  early  as  1793  the  tonnage  of  the  United 
States  exceeded  that  of  any  other  nation  except  Eng- 
land. 

103.  Expansion  of  American  shipping.  —  The  development 
of  the  carrying-trade  received  a  temporary  check  during  the 
Peace  of  Amiens  (1802),  which  left  France,  Holland,  and  the 
otlieTEuropean  nations  free  to  carry  on  their  own  trade,  but 
upon  the  renewal  of  war  in  1803  our  commerce  again  expanded 
until  1807,  when  it  amounted  to  $247,000,000;  imports, 
$138,500,000;  exports,  $108,300,000.  It  has  been  estimated 
that  the  freight  earnings  of  American  vessels  amounted  during 
this  period  to  about  $32,500,000  per  annum.  Under  this  stim- 
ulus the  tonnage  of  American  vessels  engaged  in  foreign  trade 
increased  from  123,893  tons  in  1789  to  749,341  tons  in  1805; 
during  the  same  time  the  percentage  of  foreign  trade  carried  in. 
American  bottoms  increased  from  twenty-five  lo  ninety-one 
per  cent.  The  ship-building  industry  also  received  its  share  of 
this  general  prosperity:  between  the  years  1798  and  1812  over 
two  hundred  thousand  tons  of   American-built  shipping  was 


106      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

sold  to  foreigners.  As  Prof.  H.  C.  Adams  says,  "  The  growth 
of  American  shipping  from  1789  to  1807  is  without  parallel  in 
the  history  of  the  commercial  world.''  L^^ 

104.  Tonnage  acts.  —  In  the  meantime  Congress  had  passed 
several  acts,  modeled  on  the  British  Navigation  acts,  partly 
in  retaliation  and  partly  to  secure  the  foreign  trade  for  our  own 
ships.  By  the  first  tariff  act  under  the  new  Constitution,  a 
rebated  ten^peiJL^'^^  •  ^'^^  allowed  on  all  imports  in  American 
vessels,  while  special  encouragement  was  given  to  the  China 
trade  by  making  the  duties  on  tea  brought  direct  from  the 
Orient  in  American  ships  about  one  half  those  on  tea  in  foreign 
vessels  or  in  American  vessels  if  brought  from  London.  This 
last  was  aimed  at  the  monopoly  of  the  P^nglish  East  India 
Company.  By  the  second  act  of  Congress  (July  20,  1789) 
further  protection  was  given  to  American  shipping  by  the 
following  discriminating  tonnage  dues: 

On  all  American  built,  American  owned  vessels,  per  ton 6  cents 

On  all   American   built,   foreign   owned   vessels,    per  ton 30  cents 

On  all  other  vessels,   per  ton 50  cents 

105.  Blows  at  neutral  trade.  —  The  expansion  of  American 
commerce  received  a  serious  check  in  1807  as  a  result  of  the 
various  English  Orders  in  Council  and  Napoleon's  Berlin  and 
Milan  decrees,  which  were  directed  against  the  neutral  trade. 
As  we  had  especially  profited  by  our  position  as  neutrals  be- 
fore, so  now  our  prosperity  was  most  disastrously  affected. 
The  English  Orders  in  Council  of  August,  1804,  had  declared 
all  French  ports,  from  Ostend  to  the  Seine,  to  be  in  a  state  of 
blockade,  which  was  extended  by  the  Order  of  May,  1806,  to 
all  the  coast  from  the  river  Elbe  to  Brest.  While  this  wks 
largely  in  the  nature  of  a  "  paper  blockade."  it  made  neutral 
vessels  trading  with  such  ports  liable  to  capture.  The  English 
government  hoped  in  this  way  to  deprive  France  of  needed 
supplies  from  her  colonies,  and  at  the  same  time  to  stifle  the 
alarming  growth  of  the  American  carrying -trade.  Napoleon, 
whom  the  battle  of  Jena  had  made  master  of  the  Continent, 
retorted   with   the   Berlin  decree  of   November,    1806,   which 


i 


AMERICAN    COMMERCE    AND    COMMERCIAL   POLICY      1()7 

declared  the  British  islands  in  a  state  of  blockade  and  f()rl)ade 
all  trade  with  them;  further,  no  vessel  which  had  touched  at 
an  English  port  was  to  be  permitted  to  enter  any  port  of 
France. 

This  was  quickly  followed  by  other  British  Orders  in  Council 
during  1807,  which  declared  all  ports  belonging  to  France  or 
her  colonies  or  allies  to  be  in  a  state  of  blockade,  and  stated 
that  no  neutral  vessel  could  trade  with  them  unless  it  first 
entered  a  British  port,  took  out  a  British  license  to  trade,  and 
paid  re-export  duties.  In  answer  to  this,  Napoleon  issued  the 
Milan  decree,  in  December,  1807,  which  declared  every  ship 
sailing  to  or  from  Great  Britain  or  her  colonies  to  be  good 
prize,  and  that  every  ship  which  submitted  to  the  English, 
orders  was  denationalized  and  liable  to  seizure.  These  decrees 
were  directed  against  all  neutral  trade  and  were  dictated  by  a 
desire  not  so  much  to  harm  that  as  to  injure  the  antagonist 
who  was  profiting  by  this  neutral  trade.  But  the  United  States 
was  the  only  neutral  carrier  of  importance  and  naturally  felt 
the  full  force  of  these  decrees.  Privateers  were  licensed  by 
England  and  France  and  their  allies,  and  seized  many  a  rich 
prize;  less  was  done  by  ships  of  war.  About  1600  American 
vessels  and  $60,000,000  worth  of  property  were  captured  by 
French,  English,  and  other  privateers. 

106.  The  Embargo  and  Non-intercourse  Acts.  —  As  a  peace- 
ful mode  of  retaliation  for  the  injuries  inflicted  on  American 
shipping,  a  non-interccairse--aet-had--been  passed  by  Congress, 
which  was  to  go  into  effect  in  November,  1807,^  Before  that 
time  its  operation  had  been  postponed  untilDecember,  and  its 
repeal  or  non-enforcement  w^as  generally  expected.  Jefferson, 
who  above  all  things  desired  peace,  had  also  endeavored  to 
conclude  a  treaty  with  England  in  1806,  but  had  not  been 
able  to  secure  a  satisfactory  adjustment  of  the  matters  in 
dispute.  When,  however,  the  news  of  these  various  indigni- 
ties reached  the  United  States,  Jefferson  recommended  to 
Congress  that  an  embargo  be  placed  on  American  shipping 
or,  as  he  expressed  it,  "  an  immediate  inhibition  of  the  depar- 


108      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

ture  of  our  ships  from  the  ports  of  the  United  States."  The 
Embargo  Act,  passed  December  22,  prohibited  American  vessels 
leaving  the  ports  of  the  United  States  for  those  of  any  foreign 
power.  Such  vessels  might  engage  in  the  coasting  trade,  but 
in  that  case  they  must  give  bonds  to  twice  the  value  of  the 
ship  and  cargo  that  the  cargo  would  be  landed  in  the  United 
States.  Later  acts  placed  the  navy  and  the  revenue  cutters 
at  the  disposal  of  the  executive  and  gave  him  almost  despotic 
powers  in  dealing  with  both  foreign  and  domestic  trade. 

The  effect  of  the  embargo  was  immediate  and  most  disas- 
trous upon  our  foreign  trade:  in  a  single  year  our  exports  fell 
from  $108,300,000  to  $22,400,000.  ''  In  the  large  shipping 
towns  business  of  every  kind  fell  off,  and  soon  utterly  ceased. 
The  rope  walks  were  deserted.  The  sail-makers  were  idle. 
The  shipwrights  and  draymen  had  scarcely  anything  to  do. 
Pitch  and  tar,  hemp  and  flour,  bacon,  salt  fish,  and  flaxseed 
became  drugs  upon  the  shippers'  hands.  But  the  greatest 
sufferers  of  all  were  the  sailors."  It  was  estimated  at  the 
/  time  that  thirty  thouaand-seamen  w^ere  thrown  out  of  employ-' 
ment  and  that  in  all  one  hundred  thousand  men  were  out  of 
work  for  a  year.  Thejarmer&^oo,  who  had  been  buying  land 
on  credit  and  raising  greater  crops  in  expectation  of  the  foreign 
demand,  soon  began  to  feel  the  effects,  and  many  of  them  were 
forced  into  bankruptcy.  Lumbermen  and  fishermen,  and  finally 
merchants^  were  ruined  by  the  stoppage  of  trade  with  the  outside 
world.  The  jails  were  filled  withdel^tors,  while  a  contemporary 
visitor  to  New  York  describes  that  city  as  if  ravaged  by  pest- 
ilence, so  dead  was  its  commerce.  The  effects  of  the  Embargo 
were  most  severely  felt  in  Ne\v_Eiigliind  and  New_J\[ork,  where 
foreign  commerce  was  greatest,  but  even  in  the  South  and  West 
they  were  disastrous.  So  strong  was  the  opposition  that  Jefferson 
finally  yielded  to  the  pressure,  and  fourteen  months  after  its  en- 
Nactment  the  Embargo  was  repealed.  In  its  place  was  substituted 
4 he  Non-Intercourse  Act  of  1809^ which  removed  the  restrictions 
against  trade  with  all^countries  except  England  and  France. 
As  a  result  of  these  acts,  not  merely  was  our  commerce  seri- 


AMERICAN    COMMERCE    AND    COMMERCIAL   POLICY      109 

oiisly   affected,    but    our    treaty    relations   were    strained    or 
broken. 

107.  Commercial  treaties.  —  The  first  commercial  treaty 
made  by  the  United  States,  even  before  political  independence 
had  been  gained,  was  with  our  ally  France.  By  the  treaty  of 
1778  we  were  granted  commercial  privileges  in  her  ports,  but' 
this  was  suspended  in  1798,  when  our  relations  with  that 
country  became  strained.  During  the  years  1798-1800  we 
were  practically  at  war  with  France,  but  in  the  latter  year 
Napoleon  restored  friendly  relations  and  concluded  a  treaty  of 
commerce  and  navigation,  which  secured  reciprocity  of  treat- 
ment in  respect  to  customs  duties  and  tonnage  dues.  Owing 
to  French  encroachments  upon  our  commerce  during  the 
following  years,  the  treaty  had  little  practical  value.  Sub- 
sequent treaties  were  made  with  the  Netherlands  (1782), 
Sweden  (1783),  and  Prussia  (1785).  This  treaty  of  1785,  with 
Prussia,  which  provided  for  reciprocal  duties  and  customs 
dues,  continued  in  force,  with  slight  modifications  in  1799,  for 
thirty  years.  Our  commercial  relations  with  Great  Britain 
remained  disturbed  after  the  Revolution  and  until  the  conclu- 
sion of  the  War  of  1812  secured  commercial  in  addition  to 
political  independence.  The  Jay  treaty  of  1794  granted  to 
British  merchants  greater  privileges  than  were  given  to  Amer- 
icans, and  was  so  unpopular  that  its  ratification  by  the  United 
States  Senate  was  secured  with  difficulty.  3ut  during  the 
Napoleonic  wars  commercial  treaties  did  not  suffice  to  protect 
American  merchants  or  sailors  from  aggression;  all  treaty 
relations  were  seriously  strained  by  the  Orders  in  Council  and 
the  Embargo,  and  finally  broken  off  by  the  declaration  of 
war. 

108.  The  invention  of  the  steamboat.  —  During  the  period 
of  these  foreign  entanglements  a  peaceful  revolution  of  far 
greater  moment  was  proceeding  at  home:  this  was  the  invention 
of  the  steamboat.  As  early  as  1783  Oliver  Evans  began  ex- 
perimenting with  the  application  of  steam  to  the  propulsion  of 
wagons  and  boats,  but  not  until  1804  did  he  successfully  carry 


110      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

out  his  plans.  In  that  year  he  drove  a  wagon  by  steam  through 
the  streets  of  Philadelphia  and  then  propelled  his  steamboat, 
the  Oruktor  Amphiholos,  up  the  Schuykill  by  means  of  paddle 
wheels.  Better  claims  for  priority  were  advanced  by  James 
Rumsey  and  John  Fitch,  about  the  same  time.  Fitch  began 
experimenting  with  his  steamboat  in  1785,  and  in  the  summer 
of  the  following  year  made  his  first  trial  trip  on  the  Delaware; 
paddle-wheels  were  first  used  and  later  a  system  of  six  upright 
oars  on  each  side.  The  astonishing  speed  of  eight  miles  an 
hour  w'as  made.  Pennsylvania  granted  Fitch  "the  sole  right 
and  advantage  of  making  and  employing  the  steamboat  by 
him   latelv   invented    for   a   limited   time."    namelv,   fourteen 


..  ....  WWW 


Fitch's  Second  Boat 
The   second    experimental    boat    of    John    Fitch   was   finished   in   May, 
1787,  and  was  propelled  by  oars  fastened  to  a  frame.     It  ran  on  the 
Delaware  and  made  a  speed  of  four  miles  an  hour. 

years.  A  similar  monopoly  was  granted  by  Delaware,  Xew 
York,  and  Virginia.  Regular  trips  were  made  during  the  sum- 
mer of  1790,  between  Philadelphia,  Bordentown,  Trenton,  and 
Wilmington,  but  were  abandoned  after  that  time,  as  they 
proved  unprofitable. 

Meanwhile,  Rumsey  had  succeeded  in  propelling  a  steam- 
boat of  his  own  invention  on  the  Potomac,  in  December,  1787. 
By  his  method  water  was  sucked  in  at  the  bow  and  ejected 
at  the  stern.  On  the  trial  trip  a  speed  of  four  miles  an  hour 
was  attained  against  the  current.     Before  the  end  of  the  cen- 


AMERICAN    COMMERCE    AND    COMMERCIAL   POLICY     111 

tury  other  successful  experiments  had  been  made  by  Nathan 
Read  at  Salem,  by  Samuel  Morey  on  the  Connecticut,  by 
William  Longstreet  on  the  Savannah,  by  Elijah  Ornsbee  at 
Providence,  and  by  John  Stevens  on  the  Hudson.  Defects 
in  the  engines,  in  the  size  of  the  wheels,  and  in  other  particu- 
lars prevented  any  of  these  inventions  from  becoming  com- 
mercially profitable,  however,  and  the  honor  of  first  making 
the   steamboat    a   practical   success   was   reserved   for  Robert, 


Fitch's  Third  Boat 
Fitch's  third  boat  was  the  first  steamboat  ever  built  to  carry  passengers. 
It  was  finished  in  April,  1798,  and  the  following  year  was  run  to  Burling- 
ton regularly  as  a  passenger  boat,  maintaining  a  speed  of  eight  miles  an 
hour  in  smooth  water. 


Fulton.  In  August,  1807,  he  sailed  the  Clermont  from  New 
York  to  Albany,  one  hundred  and  fifty  miles,  in  thirty-two 
hours.  The  vessel  was  one  hundred  and  thirty  feet  long,  and 
was  provided  with  side  wheels  fifteen  feet  in  diameter,  with 
buckets  four  feet  wide.  Clumsy  as  the  vessel  was,  it  demon- 
strated the  practicability  of  steam  navigation  by  water,  and 
secured  for  her  owners,  Fulton  and  Livingstone,  a  monopoly 
of  the  waters  of  New  York  State  for  twenty  years.  Steam- 
boats now  began  to  come  into  general  use:  the  summer  of  1S09 


112      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

saw  one  on  Lake  Champlain,  another  on  the  Raritan,  and  a 
third  on  the  Delaware.     Two  years  later  the  steamboat  was 


Fulton's  Clermont 
When  the  Clermont  started  on  her  epoch-making  trip  up  the  Hudson 
in  August,  1807,  sceptical  crowds  lined  the  shore  to  see  "  Fulton's 
Folly."  Fulton  himself  wrote:  "The  morning  I  left  New  York  there 
Avere  not  perhaps  thirty  persons  in  the  city  who  believed  that  the  boat 
would  even  move  one  mile  per  hour,  or  be  of  the  least  utility."  The  trip 
of  150  miles  from  New  York  to  Albany  was  made  in  32  hours.  While 
the  speed  was  slow,  the  practicability  of  the  steamboat  had  been  success- 
fully demonstrated,  and  a  new  era  in  water  transportation  introduced. 

introduced  on  the  Ohio,  and  the  era  of  steam  as  applied  to 
transportation  had  fairly  begun. 

SUGGESTIVE  TOPICS   AND   QUESTIONS.     CHAPTER  VIII 

1.  What  clauses  of  the  Constitution  give  Congress  the  right  to  regu- 
late commerce  with  ojther  nations? 

2.  Why  does  the  Neutrahty  Proclamation  mark  an  epoch  in  the 
history  of  the  United  States?  [McMaster,  II,  89;  Schouler,  I,  245;  Hart, 
Hist,  told  by  Contemp.,  Ill,  305-7.] 

3.  What  rights  had  a  neutral  nation  in  1800?  What  to-day?  [Chan- 
ning,  The  Jeffersonian  System,  chap.  15;  Encycl.  Brit.,  art.  International 
Law,  last  part.] 

4.  Were  non-importation  associations  a  good  method  of  protest? 
[Coman,  94-103;  Howard,  Preliminaries  of  the  Revol.,  see  Index.] 

5.  Why  did  the  Sugar  Act  of  1764  especially  effect  New  England? 
[Coman,  90.] 


AMERICAN    COMMERCE   AND    COMMERCIAL  POLICY     113 

6.  Was  the  Stamp  Act  unfair?  What  are  the  advantages  and  dis- 
advantages of  a  stamp  duty?  Do  we  have  such  taxes  to-day?  [Fiske, 
Rev.,  I,  14-27;  Howard,  Prehm.  of  Rev.,  chaps.  7,  8;  Johnson,  Great 
Events,  XIII,  299-301;  Plehn,  Intro,  to  Pub.  Fin.,  262.] 

7.  Why  did  the  efforts  of  the  United  States  to  secure  freedom  of  trade 
with  other  nations  fail?  [Marvin,  chap.  3;  Coman,  110-112;  Stanwood, 
Tariff  Controversies,  I,  chap.  2.] 

8.  Who  were  engaged  in  the  Continental  wars,  and  how  long  did  they 
last?  [Fisher,  Outhnes  of  Univ.  Hist.,  Ill,  515-543;  Robinson,  Hist,  of 
Western  Europe,  593-624.] 

9.  Were  there  any  other  important  neutral  nations  than  the  United 
States  at  this  time? 

10.  Describe  the  treatment  of  American  ships  and  sailors  by  England 
and  France.  [McMaster,  III,  200;  Schouler,  II,  133;  Hart,  Hist,  told  by 
Contemp.,  Ill,  chap.  18.] 

11.  Was  the  embargo  constitutional?  Was  it  wise?  What  effect 
did  it  have  on  the  economic  development  of  New  England?  [McMaster, 
III,  412;  Marvin,  chap.  7;  Coman,  173-175.] 

12.  What  were  the  English  Orders  in  Council  and  Napoleon's  Berlin 
and  Milan  decrees?  [Walker,  Making  of  the  Nation,  195-7;  McMaster,  III, 
412-417;  Fisher,  Univ.  Hist.,  527;  Coman,  172.] 

13.  What  was  the  "industrial  revolution"  in  England?  [Toynbee, 
Ind.  Rev.  in  Engl.;  Warner,  Landmarks,  262-300;  Cheyney,  Introduction. 
199-239;  Price,  chap.  9;  Seager,  Intro,  to  Econ.,  12;  Chapman,  The  Lan- 
cashire Cotton  Industry,  chaps.  2,  4.] 

14.  Were  privateers  valuable  in  aiding  us  to  obtain  our  independ- 
ence? Are  they  used  in  modern  warfare?  Why?  [Marvin,  12-18; 
Schuyler,  Amer.  Dipl.  and  Com.,  371-403;  Foster,  Cent,  of  Amer.  Dipl., 
93.] 

15.  Why  did  not  Fitch's  or  Rumsey's  or  Owen's  steamboats 
succeed?  [Bishop  I,  76-77;  Coman,  146-8;  McMaster,  I,  435,  III, 
487.] 

16.  Was  the  embargo  necessary  or  desirable?  [Channing,  The  Jef- 
fersonian  System;  Walker,  Making  of  the  Nation,  chap.  10;  McMaster, 
III,  chaps.  18,  19,  21. 

17.  Describe  our  early  trade  with  China.  [Foster,  Amer.  Dipl.  in 
the  Orient,  chap.  2;  Schuyler,  Amer.  Dipl.,  292.] 

SELECTED   REFERENCES.     CHAPTER   VIII 

**Channing:  The  Jeffersonian  System,  chaps.  15,  16. 
**Hill:  The  First  Stages  of  the  Tariff  Pohcy  of  the  United  States,  7.5-142. 
*McMaster:  History  of  the  People  of  the  United  States,  II,  220-235,  276- 
307,  412-417. 
9 


114      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

**Marvin:  The  American  Merchant  Marine,  chaps.  3-7. 
*Pitkin:  Statistical  View  of  the  United  States,  chaps.  5,  8,  9. 
**Taussig:  Tariff  History  of  the  United  States,  chap.  2. 

Comah:  Industrial  History  of  the  United  States^  171-179. 

Eighty  Years'  Progress,  132-170.  \ 

Fiske:  The  Critical  Period,  134-148. 

Hart:  History  told  by  Contemporaries,  III,  chaps.  8,  18. 
Hildreth:  History  of  the  United  States,  II,  532-559. 
Stanwood:  American  Tariff  Controversies  in  the  Nineteenth  Century, 
chaps.  1-5. 


CHAPTER   IX 
COTTON   AND   SLAVERY.    AGRICULTURE 

109.   The  introduction  of  cotton  culture.  —  Up  to  the  time 

of  the  Revokition  the  ciUture  of  cotton  had  remained  prac- 
ticahy  undeveloped.  Other  crops,  such  as  tobacco  in  Virginia, 
rice  in  South  Carolina,  and  pitch  and  tar  in  North  Carolina, 
had  proven  more  profitable.  Under  the  English  colonial 
system,  moreover,  cotton  manufacture  was  forbidden  in 
North  America,  while  the  export  of  raw  cotton  was  dis- 
couraged; both  the  domestic  and  foreign  markets  were  thus 
cut  off.  Even  rmyre  important  was  the  difficulty  and  expen- 
siveness  of  cleam^  the  fiber  from  seed  and  impurities.  A 
man  could  clean  by  hitid  only  five  or  six  pounds  a  day, 
which  made  the  cost  of  cotton  goods  prohibitive  for  general 
use. 

With  the  outbreak  of  the  Revolution  and  the  consequent 
demand  for  garments,  together  with  the  removal  of  colonial 
restrictions  and  the  encouragement  to  manufactures,  consider- 
able stimulus  was  given  to  cotton  production.  The  success 
of  the  sea-island  or  long-staple  cotton,  which  was  first  intro- 
duced into  Georgia  in  1786,  led  to  the  development  of  the 
short -staple  or  ''  upland  "  cotton  on  the  interior  lands.  By 
1789  the  production  of  both  varieties  was  estimated  by  Wood- 
bury at  1,000,000  lbs.;  in  1790,  at  1,500,000  lbs.;  and  in  1791 
at  2,000,000  lbs.  Of  this  South  Carolina  produced  three 
fourths  and  Georgia  the  remainder.  At  the  same  time,  the 
improvements  in  cotton  machinery  in  England  had  created  a 
vastly  increased  market  for  raw  cotton,  the  number  of  persons 
engaged  in  the  spinning  and  weaving  of  cotton  having  increased 
from  7900  in  1760  to  320,000  in  1787. 

115 


116      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 


110.  Whitney's  cotton-gin.  —  The  way  was  now  open  for 
the  rapid  development  of  cotton  culture  in  the  South;  the  only 
obstacle  was  the  difficulty  of  cleaning  the  fiber.     In  1792  Eli 

Whitney,  a  Connecticut  school- 
teacher, while  visiting  in 
Georgia,  had  his  attention  di- 
rected to  the  need  of  a  machine 
for  doing  this  work,  and  in 
April,  1793,  succeeded  in  per- 
fecting a  cotton-gin  by  which 
the  lint  was  picked  from  the 
seed  by  means  of  saw-teeth  on 
a  revolving  wheel.  By  this 
machine  one  thousand  pounds 
of  cotton  could  be  cleaned  by 
one  person  in  a  day,  and  im- 
mediately the  demand  for  it 
spread  throughout  the  entire 
cotton  region.  Mr.  Whitney 
and  the  partner  he  associated 
w^ith  him,  Mr.  Miller,  made  the 
mistake  of  endeavoring  to  mo- 
nopolize the  production  and  sale 
of  the  gins,  but  the  planters 
would  not  wait  for  such  a  valu- 
able invention  to  be  supplied 
so  slowly,  and  soon  invaded 
his  patents.  The  State  of 
South  Carolina  granted  him 
$50,000  to  secure  the  privi- 
lege of  the  gin  for  her  citizens,  and  North  Carolina  about 
$12,000,  most  of  which  was  soon  spent  in  wasteful  law- 
suits. 

After  the  invention  of  the  cotton-gin,  American  cotton, 
which  had  been  dirty  and  poorly  picked  up  to  this  time,  became 
a  popular  and  marketable  commodity.     The  production  and 


Eli  Whitney 
Whitney  was  born  in  Massachu- 
setts in  1765  and  graduated  from 
Yale  college  in  1792.  He  then 
went  to  Georgia  as  a  teacher  and 
while  there  was  asked  by  the  neigh- 
bors, because  of  his  known  ingenu- 
ity, to  make  a  machine  for  them 
that  would  clean  the  seed  from  the 
cotton,  which  at  that  time  was  done 
by  hand.  His  efforts  resulted  in 
the  cotton-gin,  the  most  important 
machine  ever  invented  in  the 
United  States.  His  patents  were 
invaded  and  he  made  nothing  from 
this  invention,  though  later  he  ac- 
quired a  fortune  from  the  inven- 
tion of  firearms. 


COTTON   AND    SLAVERY.     AGRICULTURE 


117 


export  increased  by  leaps  and  bounds,  as  will  be  seen  from  the 
appended  table. 

Production  and  Exports  oi-  Cotton 


Year 

Production  in 

United  States 

(in  lbs.) 

Exports  from 

United  States 

(in  lbs.) 

Price  per  lb. 
(in  cents) 

1790 

1795 

1,500,000 
8,000,000 
35,000,000 
70,000,000 
80,000,000 
75,000.000 

6,276,300 
17,789,803 
38,390,087 
63,944,459 
10,630,445 

14i 
36i 
28 
23 

1800 

1805    

1807 

1808 

211 
19 

So  rapid  indeed  was  the  development  of  this  new  industry 
that  when  Jay  negotiated  the  treaty  with  Great  Britain  in 
1794  he  apparently  did  not  know  that  cotton  was  raised  for 
exportation  in  the 
United  States;  he 
accordingly  ad- 
mitted it  among  the 
articles  not  to  be 
exported  from  the 
United  States  in 
American  bottoms. 
The  Senate,  how- 
ever, did  not  agree 
to  this  provision. 

111.  Effect  of  cot- 
ton culture    on  sla-  .      y 
very.  —Wit  h  t  he  first                         Whitney's  Cotton  Gin 
development  of  cot-    Until  Whitney's  invention  the  seeds  had  been 

ton-o-rowino-  white  removed  from  the  cotton  either  by  hand  or  by 
lon^rowm^,     \\mLe    ^^^  ^^^^^^  ^^.^^      ^^^^  ^^^  ^^^^^^  ^^,^g    forced 

labor  was  resorted  to  by  toothed  cvlinders  through  wire  ribs,  which 
and  wasexpectedto  ^^^^^^^^'^twL'^^iJtm 
prove  adequate.  The     65,  and  by  the  cotton-gin  300  pounds  of  cotton. 


118      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

scarcity  of  such  labor  in  the  South,  however,  necessitated  an 
]  early  recourse  to  the  use  of  slaves.  The  large  slave-holders,  too, 
J  eagerly  seized  the  opportunity  afforded  by  a  new  crop  to  employ 
their  slaves  in  its  production,  for  the  former  staple  southern 
crops  — indigo  and  rice  —  were  declining  in  importance.  As 
soon  as  the  culture  of  cotton  was  undertaken  by  slaves  on  an 
extended  scale,  the  social  odium  attaching  to  manual  labor 
by  a  white  man  diminished  still  more  the  supply  of  free  labor, 
and  made  cotton  from  that  time  on  essentially  a  slave  product. 
The  same  causes  operated  to  repel  immigrants  from  the  south- 
ern cotton-fields,  and  made  the  South  more  and  more  depen- 
dent upon  slave  labor  as  the  production  of  cotton  became 
more  important.  Among  the  whites  there  was  no  class  from 
which  the  necessary  labor  supply  could  have  been  drawn;  the 
large  landed  proprietors  and  their  children  seldom  engaged  in 
manual  labor,  while  the  lower  classes  of  whites  were  as  a 
rule  thriftless  and  improvident. 

It  has  been  frequently  asserted  by  southern  waiters  that 
«  the  success  of  cotton  culture  depended  upon  the  existence  of  a 
V supply  of  slave  labor,  and  that  the  two  were  indissolubly  con- 
nected. While  the  introduction  of  slave  labor  into  the  United 
States  had,  as  we  have  seen,  no  connection  with  the  production 
of  cotton,  it  is  true  that  the  development  of  cotton  culture  at 
this  time  gave  new  life  to  a  decaying  institution  and  furnished 
it  with  an  economic  reason  for  existence  during  the  next  half- 
century. 

112.  Decline  of  slavery.  —  After  the  Revolution,  slavery 
declined,  not  only  in  the  North,  where  it  was  completely  abol- 
ished by  1804,  but  in  the  South  also.  Except  on  the  rice  and 
indigo  plantations  of  the  Carolinas  and  Georgia  the  economic 
disadvantages  of  slave  labor  w^ere  so  apparent  that  many 
prominent  Southerners  favored  its  early  abolition.  By  1796, 
Virginia,  South  Carolina,  Georgia,  North  Carolina,  and  Mary- 
land, of  the  southern  States,  had  all  forbidden  the  importation 
of  slaves.  Indeed,  so  far  had  the  movement  toward  the  ex- 
tinction of  slavery  proceeded  by  1794,  that  Tench  Coxe  was 


COTTON    AND    SLAVERY.     AGRICULTURE  119 

able  to  write  in  that  year:  ''  The  separate  American  states  (with 
one  small  exception)  have  abolished  the  slave-trade,  and  they 
have  in  some  instances  abolished  negro  slavery;  in  others  they 
have  adopted  efficacious  measures  for  its  certain  but  gradual 
abolition.  The  importation  of  slaves  is  discontinued,  and  can 
never  be  renewed  so  as  to  interrupt  the  peace  of  Africa,  or 
endanger  the  tranquillity  of  the  United  States."  Even  from 
Georgia  came  the  statement  by  a  representative  in  the  fifth 
Congress:  "  Not  a  man  in  Georgia  but  wishes  there  were  no 
slaves;  they  are  a  curse  to  the  country."  The  fall  in  the  price 
of  slaves  was  a  further  evidence  of  the  growing  unprofitable- 
ness of  slavery:  in  1790,  the  best  hands  could  be  bought  for 
two  hundred  dollars  each. 

The  following  quotation  from  the  journal  of  Philip  Fithian, 
a  Princeton  student  and  tutor  to  a  rich  family  in  Mrginia  in 
1774,  gives  an  enlightened  view  of  slave  labor  on  a  great  plan- 
tation during  this  period:  ''After  supper  I  had  a  long  con- 
versation with  Mrs.  Carter  concerning  Negroes  in  Virginia, 
and  find  she  esteems  their  value  at  no  higher  rate  than  I  do. 
We  both  concluded  (I  am  pretty  certain  that  the  conclusion 
is  just)  that  if  in  Mr.  Carter's,  or  in  any  Gentleman's  estate, 
all  the  Negroes  should  be  sold,  and  the  money  put  to  interest 
in  safe  hands,  and  let  the  lands  which  these  Negroes  now  work 
lie  wholly  uncultivated,  the  bare  interest  of  the  price  of  the 
Negroes  would  be  a  much  greater  yearh^  income  than  what  is 
now  received  from  their  working  the  Lands,  making  no  allow- 
ance at  all  for  the  risk  of  the  Masters  as  to  the  crops,  and 
Negroes."  It  is  probable  that-,  but  for  the  invention  of  the 
cotton-gin  and  the  consequent  extension  of  cotton  production, 
slavery  would  gradually  have  declined  and  disappeared  through 
voluntary  action. 

113.   Extension  of  cotton  culture.  —  The  movement  toward  l^ 
abolition  of  slavery  received  a  fatal  check  as  soon  as  the  culti- 
vation of  cotton  was  shown  to  be  profitable  in  the  South.     The 
demand  for  slaves  increased  with  the  extension  of  cotton  cul- 
ture, and  "  side  by  side  slavery  and  cotton  pushed  westward 


120      ECONOMIC   HISTORY    OF    THE    UNITED    STATES 

into  the  '  back  country '  oi  the  Carolinas,  across  the  pine 
hills  and  prairies  of  Georgia  and  Alabama,  took  complete 
possession  of  the  alluvial  lands  along  the  Mississippi  and  Red 
rivers,  and  by  1860  were  laying  claim  to  the  great  central 
region  of  Texas."  At  the  beginning,  in  1791,  South  Carolina 
and  Georgia  were  the  only  important  cotton  producing  States. 
By  1801,  Virginia,  North  Carolina,  and  Tennessee  produced 
a  scant  quarter,  and  ten  years  later  Louisiana  added  a  little  to 
the  total  production,  but  South  Carolina  and  Georgia  still 
produced  three  fourths  of  the  cotton  grown  in  the  United 
States. 

The  rapid   rise  in  the   price  of  cotton  during  this   period 
greatly  stimulated  its  production:  from  14J  cents  a  pound  in 

1790  the  price  steadily  rose  to  44  cents  in  1799,  owing  to  the 
increasing  demand  in  England  and  at  home;  after  this  it  de- 
clined to  19  cents  in  1802,  at  about  which  point  it  remained 
for  the  next  six  years.  The  stimulus  thus  given  to  the  exten- 
sion of  cotton  culture  may  be  judged  when  these  prices  are 
compared  with  the  estimate  of  Woodbury  that  where  lands 
and  labor  were  low,  2  cents  a  pound  for  cotton  in  the  seed,  or 
8  cents  when  cleaned,  would  pay  expenses.  The  production 
of  cotton  consequently  increased  from  two  million  pounds  in 

1791  to  forty-eight  millions  in  1801,  and  to  eighty  millions 
in  1807,  while  the  exports  rose  from  less  than  two  hundred 
thousand  pounds  to  twenty-one  million  and  sixty-four  million 
pounds  respectively,  for  the  same  dates. 

V»  114.  Growth  of  the  slave-trade.  —  The  increased  demand 
for  slaves  to  be  used  as  hands  in  the  cot  tor -fields  led  at  first  to 
an  extension  of  the  slave-trade  and  to  fresh  importations  from 
Africa.  Although  the  separate  States  had  forbidden  the  traffic, 
the  profits  were  so  enormous  as  to  encourage  the  growth  of  a 
vast  illicit  business.  Finally,  in  December,  1803,  South 
Carolina,  influenced  no  doubt  by  the  great  gains  to  be  secured, 
repealed  all  prohibitory  laws  and  threw  open  her  ports  to  the 
slave-trade.  Charleston  became  the  most  important  slave- 
mart  in  the  United  States,  and  grew  rapidly  in  wealth  and 


COTTON    AND    SLAVERY.     AGRICULTURE 


121 


importance;  in  size  it  was  the  fourth  largest  city  and  seemed 
destined  for  a  brilliant  future.  New  England  traders  carried 
on  a  large  share  of  the  traffic,  and  slave-ships  were  fitted  out 
in  Boston  and  New  York;  the  voyages  were  usually  made 
under  the  flag  of  a  foreign  nation.  From  1804  to  1807  inclusive 
two  hundred  and  two  cargoes  of  negro  slaves  were  taken  into 
Charleston;  of  these,  8,488  were  sold  for  account  of  persons 
living  in  Rhode  Island,  Massachusetts,  and  Connecticut.  In 
the  latter  year  the  constitutional  restriction  upon  Federal 
interference  expired,  and  on  March  2,  1807,  Congress  by  law 


Deck  Plan  of  a  Slave  Ship 
The  men  on  a  slaver  were  ironed  in  pairs  by  the  ankles,  and  men  and 
women  were  compelled  to  lie  down  on  their  backs  on  the  deck  with 
their  feet  outward,  the  irons  on  the  men  being  usually  fastened  to  the 
deck.  The  space  "between  decks"  where  they  were  confined  was 
about  3  feet  10  inches  high,  and  packed  so  close  that  a  space  of  only 
5  feet  long  and  16  inches  wide  was  allotted  to  each  slave.  In  these 
quarters  they  remained  while  the  human  cargo  was  being  collected 
(3  to  6  months)  and  during  the  passage  across  the  Atlantic  (6  to  10 
weeks).  In  a  tropical  climate  and  under  these  conditions  the  mor- 
tality was  frightful. 


prohibited  the  importation  of  slaves.  The  act  was  disregarded, 
however,  as  the  punishment  was  insufficient  —  illegally  im- 
ported slaves  if  captured  were  sold  for  the  benefit  of  the  State 
into  which  they  were  being  brought  —  and  a  considerable 
illicit  trade,  continued.  Not  untilJ^2ILj^'as  the  traffic  made 
piracy,  the  penalty  for  which  was  death. 

After  the  prohibition  of  the  slave-trade,  the  demand  for 
slaves  by  the  cotton  planters  wa§jflet-by-br^e44ng-rather  than 
by  importation.  The  border  States  developed  this  new  industry 
and  thus  shared  in  the  prosperity  of  the  cotton  regions.     The 


122      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

restriction  of  importation  likewise  increased  the  price  of  slaves, 
which  by  1815  was  two  hundred  and  fifty  dollars  a  head. 

115.  Agriculture  in  the  South.  —  The  agricultural  methods 
employed  in  this  period  were  those  which  had  come  down  from 
colonial  days  and  were  a  wasteful  kind  of  extensive  agriculture. 
The  land  was  cleared  for  cotton,  as  it  had  been  for  tobacco 
and  corn,  by  girdling  the  trees  and  then  burning  them  as  they 
decayed  and  fell.  Before  the  fields  were  ready  for  cotton  a 
few  crops  of  Indian  corn  or  wheat  would  often  be  gathered. 
The  ground  was  prepared  and  cultivated  in  a  very  primitive 
fashion,  but  few  agricultural  implements  being  used  and  those 
only  of  the  rudest  and  strongest  kind,  such  as  even  the  most 
careless  slave  could  not  break.  Fertilizers  were  but  rarely 
used,  not  even  the  cotton  seeds  being  returned  to  the  soil, 
while  rotation  of  crops  was  unknown. 

Although  cotton  is  said  to  be  the  least  exhaustive  to  the 
soil  of  the  great  staple  crops  of  America,  such  methods  rapidly 
wore  out  the  land.  ''  Agriculture  in  the  South,"  said  John 
Taylor  of  Carolina,  "  does  not  consist  so  much  in  cultivating 
land  as  in  killing  it."  The  land  was  used  until  exhausted 
and  then  deserted  for  a  fresh  piece.  Owing  to  the  ease  of 
moving  his  slaves,  which  constituted  the  greater  part  of  his 
capital,  the  planter  was  ever  ready  to  move  on.  It  is  evident 
that  such  a  one-crop  system  required  unlimited  quantities  of 
land,  and  this  fact  explains  the  steady  westward  movement 
of  cotton  culture  for  the  next  fifty  years.  How  far  the  use  of 
slave  labor  was  responsible  for  the  wasteful  character  of  agri- 
culture in  the  cotton  regions  it  is  impossible  to  say,  but  the 
relation  between  the  two  was  intimate  and  southern  agriculture 
showed  no  improvement  until  after  the  Civil  War. 

116.  Agriculture  in  the  North.  —  Little  progress  was  made 
in  agriculture  until  after  the  Revolution;  this  event  directly 
and  indirectly  brought  about  changes  which  materially  affected 
American  industry.  Most  of  the  effort  of  the  farmers  was  still 
necessarily  devoted  to  enlarging  the  cultivated  area  of  their 
farms  —  clearing  the  ground,  and  removing  timber  and  stones. 


COTTON    AND    SLAVERY.     AGRICULTURE  123 

So  long  as  no  available  market  existed  for  surplus  products,  a 
suitable  stimulus  was  lacking  to  secure  improvement  in  exist-  (— ^ 
ing  methods.  Nor  was  the  mass  of  the  farmers  of  that  time 
especially  enterprising  or  well  educated.  Strange  as  such  a 
complaint  sounds  to  us,  foreign  travelers  in  the  United  States 
in  the  last  quarter  of  the  eighteenth  century  are  nearly  unani- 
mous in  describing  the  idling  and  lounging  of  the  people,  which 
they  seem  to  have  considered  a  national  vice.^  Such  a  view, 
however,  was  on  the  whole  superficial. 

After  the /Revolution,  the  greater  political  freedom  of  the  ^-^^ 
individual  and  the  removal  of  restrictions  upon  foreign  trade, 
together  with  the  increased  demand  for  our  products  during 
the  continental ^wars  abroad,  greatly  stimulated  the  interest 
J  in  agriculture.^  The  formation  of  societies  for  the  promotion 
of  agriculture  was  also  an  important  step,  for  they  awakened 
inc^uiry  and  intellectual  activity  and  paved  the  way  for  agri- 
cultural literature.  Five  such  societies  were  organized  between 
1785  and  1794  at  Charleston,  Philadelphia,  New  York,  Massa- 
chusetts, and  Connecticut.  In  1776  less  than  forty  news- 
papers were  published  in  the  country,  none  of  them  agricultural; 
but  these  societies  published  books,  pamphlets,  and  papers, 
and  thus  prepared  the  way  for  the  agricultural  periodical  and 
newspaper,  which  began  early  in  the  nineteenth  century.  By 
their  meetings  and  publications  the  agricultural  societies  also 
secured  a  diffusion  of  the  knowledge  which  had  been  acquired 
in  the  separate  colonies  and  made  repeated  trials  of  the  same 
thing  less  necessary;  they  also  extended  the  use  of  improved 
implements  and  labor-saving  machines. 

117.  Farm  implements.  —  With  the  exception  of  plowing 
and  harrowing,  practically  all  farm  operations  at  the  end  of 
the  eighteenth  centuryjwere  perfQxmedJ3v.jiianual-la]3or^  with 
the  aid  of  very  rude  and  relatively  inefficient  tools.  In  the 
first  census  only  one  manufactory  of  agricultural  implements 
was  mentioned,  a  small  establishment  in  Massachusetts  which 
made  annually  1100  rakes,  valued  at  $1870;  even  as  late  as  1820 
1  H.  Adams,  Hist,  of  the  U.  S.,  vol.  I,  p.  56. 


124      ECONOMIC   HISTORY    OF    THE    UNITED    STATES 

only  a  few  small  factories  of  plows,  scythes,  axes,  shovels,  hoes, 
etc.,  were  enumerated.  The  plow  at  the  time  of  the  Revolu- 
tion was  of  essentially  the  same  form  as  that  of  the  ancients, 
with  wooden  mold-board  and  clumsy  frame.  The  first  patent 
for  a  cast-iron  plow  in  the  United  States  was  granted  in  1797 
to  Charles  Newbold  of  New  Jersey,  who,  after  spending,  as  he 
alleged,  $30,000  in  trying  to  get  it  into  use,  abandoned  the 
attempt,  the  farmers  declaring  that  iron  plows  poisoned  the 


Farming  Tools,  1790 
This  meager  list  represents  practically  all  the  agricultural  imple- 
ments used  })y  American  farmers  at  the  end  of  the  eighteenth  cen- 
tury. Notice  the  clumsy  plow,  with  wrought-iron  share,  wooden 
mold-l)oard,  and  heavy  beam  and  handles;  the  wooden  rake  and 
fork;  the  primitive  scythe,  sickle  and  flail.  Great  manual  strength 
was  necessary  to  use  these  tools,  and  the  work  was  most  exhausting. 

soil  and  prevented  the  growth  of  crops.  The  first  really  great 
improvement  in  the  plow  was  the  result  of  studies  made  by 
Thomas  Jefferson  on  the  shape  of  the  mold-board.  The  intro- 
duction of  the  cast-iron  plow  into  general  use,  which  was  com- 
plete by  1825,  marked  an  era  in  American  agriculture,  and  led 
directly  to  many  other  improvements. 

Two    other   important    agricultural    machines   which   were 
introduced  during  this  period  were  the  grain-cradle  for  cutting 


COTTON   AND   SLAVERY.     AGRICULTURE  125 

the  crop,  the  first  patent  for  which  was  issued  in  1803,  and  the 
fanning-mill  for  cleaning  it  after  it  was  threshed,  which  soon 
superseded  the  old  hand-fan.  A  beginning  was  also  made  in 
the  application  of  chemistry  to  agriculture,  but  the  development 
of  a  science  of  agriculture  did  not  take  place  until  after  1840. 

118.  Agricultural  products.  —  The  agriculture  of  the  period 
under  discussion  was  for  the  most  part  simply  self-sufficing, 
though  of  some  articles  there  was  an  exportable  surplus.  Of 
these  tobacco  was  the  most  important  until  1803,  when  it  was 
passed  by  cotton,  which  thereafter  constituted  about  one 
third  of  our  agricultural  exports.  In  New  England  hay  was 
the  most  important  single  crop.  The  production  of  grains 
and  live  stock  was  greatly  increased  by  the  rapid  settlement 
of  the  Ohio  valley;  the  population  of  Kentucky,  Tennessee, 
Ohio,  Indiana,  and  Illinois  increased  in  the  decade  ending  with 
1810  from  about  300,000  to  935,800.  Most  of  the  increase  in 
foodstuffs  was,  however,  consumed  at  home  by  the  growing 
population.  The  total  production  cannot  be  stated,  but  there 
was,  in  addition  to  tobacco  and  cotton,  a  considerable  export 
of  wheat  and  flour,  rice,  Indian  corn  and  meal;  beef,  pork, 
tallow,  hams,  butter  and  cheese,  lard,  live  cattle,  and  horses. 
The  value  of  the  exports  from  1802  on,  when  statistics  were 
first  collected,  is  shown  in  the  table  on  page  126.  It  should  be 
remembered,  however,  that  owing  to  the  Napoleonic  wars 
abroad,  the  exports  during  these  years  were  abnormally  large; 
during  the  Embargo  and  the  War  of  1812  they  declined  greatly. 

A  characteristic  of  the  early  years  of  the  century  was  the( 
concentration  of  farming  upon  the  cultivation  of  the  more 
profitable  crops,  and  the  elimination  of  many  which  had  long 
been  under  experiment.  In  New  England  and  the  middle 
States  attempts  were  still  being  made  to  grow  lucerne,  vetches, 
rape,  spelt,  spurry,  poppies,  madder,  woad,  and  similar  crops, 
but  the  discussions  initiated  by  the  agricultural  societies 
showed  most  of  them  to  be  unprofitable  and  their  culture  was 
now  finally  discontinued. 

119.  Causes  of  agricultural  progress.  —  In  addition  to  the 


126      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

conditions  already  named,  President  F.  A.  Walker  mentions  ^ 
three  other  causes  which  he  thinks  are  responsible  for  our  great 
progress   and   pre-eminence   in   agriculture   since  the   colonial 

/days.  First,  the  vast  breadth  of  virgin  lands,  which  required 
only  the  cultivation  of  the  best  soils.  Second,  the  popular 
tenure_oLiiifi— hilld_arid  excellent  laws  for  the  registration  of 
titles  and  transfer  of  real  property.  Third,  the  fact  that  the 
agricultural  class,  unlike  the  body  of  cultivators  in  almos- 
every  country  in  Europe,  had  never  constituted  a  peasantry, 
in  any  proper  sense  of  that  term.  ^'  The  men  who  tilled  the 
soil  hej;e  were  the  sama  kind  of  men,  precisely,  as  those  who 
filled  the  professions  or  engaged  in  commercial  or  mechanical 
pursuits.  .  .  .  This  state  of  things  made  American  to  differ 
from  European  agriculture  by  a  wide  interval.  There  was  then 
no  other  country  in  the  world  .  .  .  where  equal  mental  activity 
and  alertness  have  been  applied  to  the  soil  as  to  trade  and 
industry.  But  even  more  than  the  total  effect  of  the  fortunate 
conditions  which  have  been  indicated,  American  agriculture 
in  those  days  owed  its  realh^  remarkable  power  to  a  special, 
almost  a  technical,  quality  of  our  people,  namely,  mechanical 
insight  and  invention." 

Value  of  Agricultural  Exports 


Vegetable 

Products  other 

Animal 

Year 

than  Tobacco 
and  Cotton 

Products 

Tobacco 

Cotton 

1802... 

$12,790,000 

$6,220,000 

$5,250,000 

1803  . .  - 

14,080,000 

$4,135,000 

6.209,000 

7,920.000 

1804  . .  - 

12,250,000 

4,300,000 

6,000,000 

7,650,000 

1805... 

11,752,000 

4,141,000 

6,341,000 

9,445,000 

1806  . . . 

11,850,000 

3,274,000 

6,572,000 

8,332,000 

1807  . . . 

14,432,000 

3,086,000 

5,476,000 

14,232,000 

1808... 

2,550,000 

968,000 

26,000 

2,221,000 

The  Making  of  the  Nation,  p.  66. 


COTTON    AND    SLAVERY.     AGRICULTURE  127 

120.  Public  lands  and  early  land  policy.  —  At  the  close  of 
the  Revolution  the  lands  between  the  AUeghanies  and  the 
Mississippi  River,  which  were  ceded  by  England  in  the  treaty 
of  Ghent,  were  claimed  by  seven  of  the  original  States.  Their 
claims,  based  upon  colonial  grants,  were  confused  and  often 
conflicting,  and  led  to  dissensions,  especially  with  the  landless 
States.  Owing  chiefly  to  the  insistence  of  Maryland,  the  States 
finally  agreed  to  cede  their  rights  to  the  western  lands  to  the 
central  government,  and  by  1802  the  United  States,  which 
did  not  own  a  single  acre  of  land  in  1781,  was  in  possession  of 
an  immense  public  domain  of  333,108  square  miles.  Since 
that  time  it  has  been  increased  by  annexation  and  purchase, 
and  at  the  same  time  reduced  by  sale  and  gift. 

In  the  disposal  of  the  public  land  two  distinct  policies  have 
been  pursued  by  the  United  States.  According  to  the  first, 
which  continued  from  about  1784  to  1820,  it  was  held  that  the 
lands  should  be  used  and  sold  for  the  sake  of  revenue  and  to 
pay  off  the  public  debt.  Under  the  second,  which  has  obtained 
from  1820  to  the  present  time,  the  western  lands  were  to  be 
disposed  of  —  sold  or  given  away  —  to  settlers  and  others  for 
the  sake  of  developing  the  country.  As  a  rapid  disposal  of  the 
public  lands  and  immediate  revenue  were  desired  at  first,  it 
was  provided  in  1785  that  land  should  be  sold  only  in  large 
quantities;  640  acres  was  the  minimum  amount  one  person 
could  purchase.  Under  this  act  a  few  large  sales  were  made, 
all  in  the  present  State  of  Ohio,  amounting  by  1800  to  1,484,087 
acres,  or  less  than  100,000  acres  a  year.  The  effect  was  to 
concentrate  the  holdings  in  the  hands  of  a  few  large  specula- 
tors or  proprietors  rather  than  in  the  possession  of  actual 
settlers,  and  this  policy  was  accordingly  modified  in  1800. 

121.  Sales  on  credit.  —  The  act  of  May,  1800,  and  subse- 
quent acts  permitted  the  sale  of  land  in  minimum  tracts  of 
160  and  320  acres,  on  credit,  at  the  fixed  price  of  $2  an  acre. 
Under  the  influence  of  the  credit  provision,  by  which  only 
one  fourth  of  the  purchase  money  had  to  be  paid  down,  the 
rest  falling  due  in  three  annual  instalments,  large  sales  were 


128       ECONOMIC  HISTORY   OF   THE    UNITED  STATES 

made,  amounting  in  the  next  twenty  years  to  about  18,000,000 
acres.  Many  of  the  purchasers  were  speculators  and  many 
were  settlers  who  had  assumed  obligations  beyond  their  ability 
to  fulfil,  especially  during  the  hard  times  from  1808  to  1815. 
After  that  year  the  great  rise  in  the  price  of  cotton  to  26  and 
34  cents  a  pound  led  to  still  greater  speculation  in  western 
lands,  amounting  to  over  five  and  a  half  million  acres  in  the 
single  year  1819.  The  fall  in  the  price  of  cotton  the  follow- 
ing year  and  other  causes  led  to  another  crash,  and  the  arrears 
to  the  government  for  land  sales  grew  to  $21,213,350.  Nu- 
merous relief  acts  had  already  been  passed  upon  the  demand 
of  impecunious  debtors,  but  in  1820  the  matter  was  finally 
adjusted  by  allowing  those  indebted  to  the  government  to 
secure  the  proportion  of  land  already  paid  for  by  relinquishing 
the  remainder  to  the  United  States.  About  2,500,000  acres 
reverted  to  the  government  under  these  acts. 

SUGGESTIVE  TOPICS  AND   QUESTIONS.     CHAPTER  IX 

1.  To  what  extent  had  cotton  been  produced  throughout  the  world 
before  the  introduction  of  the   cotton-gin?     [Encycl.   Brit.,  art.  Cotton.] 

2.  Describe  Whitney's  cotton-gin,  previous  attempts,  and  his  sub- 
sequent treatment.  Do  you  think  he  was  treated  fairly?  [Pitkin,  Stat. 
View,  109;  Hammond,  Cotton  Culture,  25-31;  Bishop,  Hist,  of  Amer. 
Manuf.,  II,  101;  Johnson,  Great  Events,  XIII,  341-6,  XIV,  271-294; 
Encycl.] 

3.  Has  any  other  product  ever  exerted  such  an  effect  on  the  develop- 
ment of  any  country  as  cotton  on  that  of  the  United  States? 

4.  What  progress  had  been  made  toward  emancipation  and  abolition 
of  slavery  prior  to  1793?  [DuBois,  Suppression  of  African  Slave-trade, 
chaps.  2-5;  Coman,  116-120,  255;  Ingle,  Southern  Side-lights,  chap.  8; 
Livermore,  Opinions  of  the  Founders,  20-24,  36-44.] 

5.  Where  were  most  of  the  slaves  to  be  found  in  1790?  How  were 
they  treated?     [As  under  question  4.] 

6.  Was  the  North  interested  in  the  maintenance  of  slavery,  and  if  so 
in  what  way? 

7.  What  was  the  provision  in  the  Constitution  prohibiting  Congress 
from  suppressing  the  slave-trade  prior  to  1807?     Why  was  it  inserted? 

8.  Describe  the  slave-trade  as  it  existed  before  its  prohibition  by 
Congress  in  1807.  [DuBois,  Suppression  of  African  Slave-Trade;  Spear, 
The  African  Slave-Trade;  McMaster,  II,  15.] 


COTTON  AND  SLAVERY.     AGRICULTURE  129 

9.  Why  did  the  population  increase  so  much  more  rapidly  in  the 
free  States  than  in  the  slave  States? 

10.  What  were  the  economic  and  social  characteristics  of  the  North 
and  South  at  this  time?  [H.  Adams,  Hist,  of  U.  S.,  II,  chaps.  1,  2; 
McMaster,  I,  17;  II,  4-16.] 

11.  Give  a  picture  of  farming  in  New  England  at  this  time.  [Dwight, 
Travels  in  New  England  and  New  York;  Eighty  Years'  Progress,  27.] 

12.  What  were  the  principal  products  of  the  United  States  during 
this  period,  and  where  raised?     [Pitkin,  Stat.  View,  chap.  4.] 

13.  ^^■hat  influence  did  the  growth  of  agricultural  societies  have  on 
the  development  of  agriculture?  [Eighth  census  (1860),  vol.  Agric,  13; 
Rep.  of  U.  S.  Com'r.  of  Agric,  1S72,  282;  Rep.  of  Conn.  Bd.  of  Agric, 
ISSO,  98.] 

SELECTED   REFERENCES.     CHAPTER  IX 

*Bassett:  The  Federalist  System,  chaps.  12,  13. 

*Brewer:  History  of  Agricuhure,  in  Tenth  Census  (1880),  vol.  Agriculture. 

*De  Bow:  Industrial  Resources  of  the  South  and  Southwest,  I,  122,  209, 

237. 
**Du  Bois:  Suppression  of  the  African  Slave-Trade. 
**Hammond:  The  Cotton  Industry,  chaps.  1-3. 
*Woodbury:  Report  on  the  Cultivation,  Manufacture,  and  Foreign  Trade 

of  Cotton. 

Bishop:  History  of  American  Manufactures,  I,  356. 

Channing:  The  Jeffersonian  System,  chaps.  7,  8. 

Hart:  American  History  told  by  Contemporaries,  III,  chaps.  5,  7. 

Hildreth:  Despotism  in  America,  chap.  3. 

Russell,  R.:  North  America,  chaps.  8-10. 

Weston:  Progress  of  Slavery,  chaps.  1-4. 


10 


>>-- 


CHAPTER  X 
INTRODUCTION   OF  MANUFACTURES 

122.  Manufactures  during  the  Revolution.  —  The  course  of 
industrial  development  was  but  little  influenced  by  the  events 
which  immediately  preceded  and  led  up  to  the  Revolution. 
The  spirit  of  antagonism  to  the  English  colonial  legislation 
and  the  desire  to  lessen  our  industrial  dependence  upon  Great 
Britain  had  indeed  somewhat  curtailed  the  importation  of 
luxuries  two  or  three  times  before  the  outbreak  of  hostilities. 
With  the  closing  of  the  port  of  Boston,  the  first  Congress  passed 
the  only  aggressive  act  of  that  bod}'  —  a  resolution  calling 
upon  the  several  colonies  to  pass  non-importation  agreements 
and  binding  themselves  and  their  constituents  to  abide  by 
them.  During  the  Revolution  the  manufacture  of  various 
articles  w^as  greatly  stimulated  by  the  necessities  of  the 
war,  by  the  interruption  of  foreign  commerce,  and  by  the 
high  prices  of  a  paper  money  regime.  Especially  was  this 
true  of  the  iron  industry,  of  textiles,  and  of  other  articles  of 
necessity. 

Upon  the  return  of  peace,  these  infant  industries  quickly 
languished,  as  they  could  not  compete  with  the  flood  of  cheap 
manufactures  which  were  poured  into  the  country  by  Great 
Britain.  Political  independence  had  been  achieved,  but 
industrially  the  United  States  were  as  dependent  upon  Great 
Britain  as  they  had  been  while  colonies.  They  continued  to 
import  most  of  their  manufactured  commodities  from  England 
and  to  devote  themselves  as  before  to  agriculture  and  com- 
merce. English  manufacturers  at  this  time  possessed  a  mo- 
nopoly of  the  new  machinery  which  was  revolutionizing  the 
textile  industry,  and  by  securing  the  prohibition  of  its  expor- 

130 


INTRODUCTION  OF  MANUFACTURES 


131 


tation  prevented  the  growth  of  manufacturing  in  the  United 
States,  as  they  had  previously  done  by  the  Navigation 
Acts, 

123.  The  industrial  revolution  in  England.  —  Beginnino- 
with  about  1760  a  remarkable  series  of  inventions,  especially 
in  textile  manufacturing,  had  completely  revolutionized  Eng- 
lish industry.  These  inventions  consisted  of  the  application 
of  machinery  to  spinning  and  weaving.     Before  1764  all  yarn 


nARGREAVE's    SpIXXIXG    JeXXY 

James  Hargreaves,  an  illiterate  weaver  of  Lancashire,  had  the  idea  of  his 
spinning  jenny  suggested  to  him  hy  seeing  an  overturned  spinning-wheel 
continue  its  motion  while  it  lay  on  the  ground.  Acting  on  this  idea,  in 
1767  he  constructed  a  rude  machine  of  eight  spindles,  turned  by  a  l^and  from 
a  horizontal  wheel.  In  honor  of  his  wife  he  named  it  the  "Spinning  Jenny." 
The  machine  was  later  improved  so  as  to  work  eighty  spindles.  Hargreaves's 
invention  occasioned  great  alarm  among  the  spinners,  who  broke  into  his 
house  and  destroyed  his  machine. 

used  in  the  manufactures  of  textiles  of  all  kinds  was  spun 
in  single  threads  upon  the  domestic  spinning-wheel,  while  the 
weaving  was  done  upon  the  hand-loom.  Clumsy  as  was  this 
instrument,  it  could  weave  cloth  faster  than  the  yarn  could 
be  produced,  but  between  1764  and  1780  spinning  machinery 
was  perfected  by  Hargreaves,  Arkwright,  and  Crompton,  by 
which  it  was  made  possible  to  spin  several  thousand  threads 
at  once.     The  yarn  could  now  be  spun  more  rapidly  than  it 


132       ECONOMIC  HISTORY  OF   THE   UNITED  STATES 

could  be  woven,  but  in   1785  Cartwright  invented  a  power- 
loom,  and  the  textile  machinery  was  practically  complete. 

Up  to  this  time  textile  mills  had  been  located  upon  streams 
of  water,  from  which  power  was  obtained;  the  application  of 


Arkwright's  First  Spinning  Frame 
Richard  Arkwright  improved  upon  the  process  of  Hargreaves's 
jenny,  by  inventing  a  machine  which  spun  a  much  stronger  thread. 
By  this  method  the  carded  material  was  carried  through  successive 
pairs  of  rollers,  each  pair  revolving  more  rapidly  than  the  last,  thus 
drawing  out  the  roving  to  the  requisite  fineness.  This  machine  pro- 
duced a  stronger  and  harder  yarn  than  was  made  by  the  jenny. 
Arkwright  invented  other  machines  which  made  possible  the  rapid 
spinning  of  a  number  of  threads  at  the  same  time,  and  acquired  a 
large  fortune. 

the  steam-engine,  which  had  already  been  used  for  draining 
mines  and  raising  coal  to  the  surface,  as  the  motive  power  to 
drive  the  new  machinery  made  it  possible  to  locate  mills  near 
the  larger  centers  of  population.     The  use  of  the  steam-engine 


INTRODUCTION   OF  MANUFACTURES  133 

in  mining  also  stimulated  the  iron  industry,  whicli  could  now 
secure  its  supplies  of  fuel  more  cheaply. 


Cro:mptox's  Spixxixg  Mule 
The  inventions  of  Hargreaves  and  Arkwright  were  combined  in  1779 
by  Samuel  Crompton  in  a  single  machine,  which  was  called  the 
"mule"  on  account  of  its  hybrid  origin.  He  noticed  that  the  roller 
process  spun  the  stronger  thread  but  that  the  jenny  was  more  rapid. 
In  his  machine  the  rovings  were  delivered  from  the  rollers  to  spindles 
placed  on  a  carriage  which  traveled  away  from  the  rollers  while  the 
thread  was  l)eing  twisted,  thus  stretching  it  out,  and  returned  toward 
the  rollers  while  the  thread  was  being  wound.  Thus  drawing, 
stretching,  and  twisting  were  performed  at  one  operation.  As  this 
machine  was  not  patented  it  soon  came  into  general  use,  but  the 
inventor  received  very  little  for  it. 

124.  England  and  the  exportation  of  machinery.  —  Through 
the  possession  of  these  machines,  England  controlled  the  manu- 
facture of  cotton  and  woolen  goods,  for  without  them  no  coun- 
try could  hope  to  compete  successfully  with  her.  Parliament 
jealously  guarded  this  monopoly  and  passed  stringent  laws 
prohibiting  the  exportation  of  machines,  plans,  or  models. 
In  1774  the  exportation  of  any  tools  us^d  in  the  cotton  or 
linen  manufacture  was  made  punishable  by  a  fine  of  £200; 
this  statute  was  extended  in  1781  to  woolen  and  silk  manu- 
factures, and  imprisonment  for  twelve  months  was  added  to 
the  penalty.  In  the  following  year  the  exportation  of  ma- 
chinery used  in  printing  cotton  goods  was  forbidden  under  a 


134       ECONOMIC  HISTORY  OF   THE    UNITED  STATES 

fine  of  £500;  this  proliibition  was  also  made  to  apply  to  tools 
used  in  the  iron  and  steel  industry.  Seducing  English  oper- 
atives to  emigrate  was  also  severely  punished.  By  these 
means,  which  were  simply  the  application  of  mercantilist 
principles.  Parliament  hoped  to  secure  to  England  the  entire 
gain  from  the  newly  invented  machinery  and  to  make  her  the 
manufacturing  nation  of  the  world. 

125.   The  intrcduction  of  machinery  into  the  United  States 
and  attempts  at  manufacturing.  —  As  a  result  of  these  obstacles 


First  Mill  ix  Ohio 
This  was  the  Wolf  Creok  Mill,  built  in  1789,  about  a  mile  above  its 
junction   with   the   Muskingum   River.     Owing  to   the   scarcity   of 
labor,  gristmills  and   sawmills  were   a   prime   necessity   in   pioneer 
settlements  and  were  early  erected. 


.the  American  manufacturers  were  compelled  to  smuggle  or 
invent  the  new  machinery,  and  it  is  a  matter  of  record  that 
both  methods  were  practised  until  most  of  the  secrets  of  the 
English  inventors  were  duplicated  in  the  United  States.  As 
early  as  1775  a  spinning-jenny  after  the  Hargreave  type  was 
operated  in  Philadelphia,  and  in  1786  Robert  and  Alexander 
Barr,  two  Scotch  immigrants,  were  granted  $1000  by  Massa- 
chusetts to  enable  them  to  construct  machines  for  carding, 
roping,  and  spinning  wool  and  cotton.     These  machines  were 


INTRODUCTION  OF  MANUFACTURES  185 

probably  the  first  in  the  country  based  upon  the  Arkwright 
models.  The  first  cotton  factory  in  the  United  States  was 
erected  at  Beverly,  Massachusetts,  in  the  following  year,  and 
was  followed  soon  after  by  others  in  Rhode  Island,  New  York 
and  Pennsylvania.  The  power  for  all  of  these  was  probably 
furnished  by  horses.  Several  attempts  to  introduce  manu- 
factures were  also  made  in  the  South  and  West. 

American  inventors  were  likewise  busy:  in  1783  Oliver 
Evans  greatly  improved  the  grain-mills  and  a  few^  years  later 
invented  the  first  double  acting,  high-pressure  steam-engine 
'on  record;  Rumsey,  Fitch,  Perkins,  and  others  added  to  the 
list  of  purely  American  inventions.  On  the  whole,  however, 
manufactures  languished  during  this  period,  on  account  of  the 
foreign  competition  and  the  inefficiency  of  the  government  at 
home.  Indeed,  the  inability  of  Congress  to  provide  properly, 
under  the  Articles  of  Confederation,  for  the  regulation  of  our 
foreign  commerce,  and  the  irritating  commercial  legislation  of 
the  States,  led  to  the  calling  of  the  Annapolis  convention  and 
the  adoption  of  the  Constitution. 

126.  The  Constitution  and  the  beginning  of  protection.  — 
The  year  1789  does  not  indicate  any  such  break  in  the  economic 
life  of  the  people  as  it  does  in  their  political  life.  With  the 
establishment  of  a  more  centralized  government,  however,  an 
effort  was  made  on  behalf  of  the  distressed  "  infant  manu- 
factures "  of  the  time  to  secure  some  protection  from  foreign 
competition. 

The  second  act  passed  by  Congress  under  the  new  Consti- 
tution, on  July  4,  1789,  opened  with  the  preamble:  "  Whereas 
it  is  necessary  for  the  support  of  the  government,  for  the  dis- 
charge of  the  debts  of  the  United  States,  and  for  the  encourage- 
ment and  protection  of  manufactures,  that  duties  be  laid  on 
goods,  wares,  and  merchandise  imported;  be  it  enacted,"  etc. 
While  it  seems  clear  that  some  measure  of  protection  was 
intended  by  this  act,  the  main  purpose  w^as  revenue  and  the 
rates  were  very  moderate,  the  average  being  only  eight  per  cent, 
and  the  highest  ad  valoremiiut^^-fifteenr per  cent.,  which  is  the 


136       ECONOMIC  HISTORY   OF   THE    UNITED  STATES 

lowest  scale  of  duties  ever  imposed  by  Congress  in  a  genei 
act.  On  the  other  hand,  it  must  be  remembered  that  th 
great  distance  and  high  freight  rates  afforded  considerable 
additional  protection.  In  addition  to  this  and  other  tariff 
acts  passed  during  the  years  1789-1793,  a  tonnage  act  on 
foreign  vessels  and  a  discriminating  duty  on  all  goods  not  im- 
ported in  American  vessels  gave  further  protection,  but  this 
time  to  American  shipping  rather  than  to  manufactures. 

127.  The  birth  of  the  factory  system.  —  Several  attempts 
were  made  in  different  places  to  introduce  spinning  by  power, 
but  the  first  complete  cotton  machinery  was  set  up  at  Paw- 

/ tucket,  Rhode  Island,  in  1789,  by  Samuel  Slater,  called  by 
President  Jackson  the  ''  father  of  American  manufactures." 
Owing  to  the  stringent  legislation  against  the  exportation  of 
machinery  from  England,  Slater  was  compelled  to  make  all 
the  machinery  used  in  this  factory  from  memory.  Several 
writers  of  this  period  speak  of  the  great  progress  that  was 
being  made  in  manufacturing.  Brissot  de  Warville  says, 
writing  of  his  travels  in  the  United  States:  ''  It  is  impossible 
to  enumerate  all  the  articles  to  which  they  have  turned  their 
attention;  almost  one  half  of  which  were  unknown  before  the 
war.  .  .  .  The  spinning  machines  of  Arkwright  are  Avell  known 
here  and  are  made  in  this  country." 

In  his  famous  Report  on  Manufactures,  in  1791,  Alexander 
Hamilton  described  some  seventeen  industries  which  had 
alread}^  reached  a  considerable  development,  involving  the 
collection  of  raw  materials  from  various  localities  for  the 
purpose  of  manufacturing,  the  division  of  labor,  and  the  sale 
of  the  product  in  distant  markets.  The  articles  enumerated 
by  him  included  manufactures  of  leather,  iron,  tools  and 
machinery,  textile  goods,  potters'  wares,  spirits,  paper,  hat-s, 
oil,  sugar,  hardware,  carriages,  tobacco,  and  gunpowder. 
''  Besides  manufactories  of  these  articles,  which  are  carried 
on  as  regular  trades  and  have  attained  to  a  considerable  degree 
of  maturity,  there  is  a  vast  scene  of  household  manufacturing, 
which  contributes  more  largely  to  the  supply  of  the  community 


INTRODUCTION    OF    MANUFACTURES  137 

an  could  be  imagined  without  having  made  it  an  object  of 
articular  inquiry.  Great  quantities  of  coarse  cloths,  etc., 
...  are  made  in  the  household 
way,  and,  in  many  instances, 
to  an  extent  not  only  sufficient 
for  the  supply  of  the  families 
in  which  they  are  made,  but 
for  sale,  and  even,  in  some 
cases,  for  exportation.  It  is  com- 
puted in  a  number  of  districts 
that  two  thirds,  three  fourths, 
and  even  four  fifths  of  all  the 
clothing  of  the  inhabitants  are 
made  by  themselves."  In  17S!' 
Tench  Coxe  estimated  the 
total  value  of  American  manu- 
factures as  '' certainly  greater  Alexander  Hamilton 
than       double       the       value       of  When  Washington  became  presi- 

their     exports  '  in     native     com-  l^^  he  appointed  Hamilton  sec- 

I  y.       yj   L    j-etary  of  the  treasury.     Although 

modities,"      or     at      about      $50,-  only  about  thirty-five  years  of  age 

000  000  ^^  organized  his  department  and 

'         '  scon  put  the  finances  of  the  gov- 

128.     Importations    of   manu-  ernment   on  a  sound   basis.     He 

<:<./»+, ,^^t.  T+       v^,,-,4-       u^  prepared  numerous  and  valuable 

factures.  —  It     must      be     con-  [^^\^^^^  ^^  ^^^  ^^^^^^^^^  ^,^^  ^,^j^^^ 

fessed     that     most     of    the     pro-  sul^jects,  of  which  that  on  manu- 
duction    was    still    carried    on    in  ^^ctures  is  one  of  the  best  known. 

the  household,  and  that  the  so-called  factories  were  small  and 
often  short-lived.  The  movement  in  favor  of  manufacturing, 
which  showed  itself  in  the  passage  of  the  act  of  1789,  received  a 
serious  setback  in  the  next  decade.  A  considerable  import  trade, 
of  textiles  was  developed  from  India  and  China,  and  from  Russia 
and  Holland;  importations  from  England  were  also  largely 
increased.  It  was  cheaper  to  buy  imported  goods  than  to 
manufacture  them  at  home.  On  the  other  hand  there  was  an 
increasing  demand  abroad  for  our  agricultural  staples,  and 
the  outbreak  of  the  Napoleonic  wars  diverted  our  labor  and 
capital  into  this  channel  and  that  of  the  carrying  trade. 


138       ECONOMIC  HISTORY   OF   THE    UNITED  STATES 

So  slow  was  the  growth  of  manufactures  that  in  1804, 
fifteen  years  after  the  establishment  of  the  first  cotton-mill  by 
Samuel  Slater,  there  were  only  four  cotton  factories  in  the 
country.  Indeed,  Great  Britain  supplied  us  with  such  a  large 
proportion  of  our  manufactured  goods  that  when  in  1806  it 
was  proposed  to  cease  intercourse  with  her,  such  a  plan  was 
pronounced  impossible.  "  China,  glass,  pottery,  hardware, 
cutlery,  edged  tools,  blankets,  woolen  cloths,  linen,  cotton 
prints,  and  a  hundred  other  articles  of  daily  use  came  from 
Great  Britain  in  such  quantity  that  the  value  of  each  year's 
imports  amounted  to  $35,000,000,  and  the  duties  paid  on  them 
to  $5,500,000,  or  nearly  one  half  of  the  entire  receipts  from 
customs."  English  and  French  outrages  against  our  neutral 
shipping,  however,  required  retaliation;  the  English  Orders 
in  Council  and  the  Berlin  and  Milan  Decrees  were  soon 
followed  by  the  Embargo  Act,  which  cut  off  all  trade  with 
Europe  and  her  colonies.  This  act  may  be  regarded  as  closing 
the  period  of  our  colonial  or  formative  life,  and  ushering  in  the 
beginning  of  a  national,  organic  industrial  development. 

129.   The    condition    of    labor.  —  As    during    the    colonial 

; period,  the  majority  of  the  population  was  engaged  in  agri- 
culture, but,  except  in  the  South  where  the  greater  part  of  the 
labor  was  performed  by  slaves,  most  of  the  agriculturists  in 
the  country  were  independent  farmers.  The  wage-earners 
were  chiefly  artisans  and  were  to  be  found  almost  entirely  in 
the  North;  it  is  this  class  that  is  referred  to  in  the  discussion  of 
the  condition  of  the  laborer.  The  Revolution  made  but  little 
difference  in  his  lot :  after,  as  before,  the  ordinary  unskilled 
workman  earned  on  the  average  about_Uvo  shillings  a  day; 
the  hours  of  labor  were  from  sunrise  to  sunset.  While  poverty 
was  rare,  the  standard  of  living  was  low,  and  little  beyond  the 
bare  necessities  of  life  was  secured  by  the  laborer  in  exchange 
for  his  wage.  The  westward  migration  and  the  development 
of  the  carrying  trade  raised  the  pay  of  unskilled  labor  about 
the  beginning  of  the  nineteenth  century  to  between  80  and 
90  cents  a  day. 


INTRODUCTION  OF  MANUFACTURES  139 

As  yet,  little  or  nothing  had  been  done  to  protect  the  rights 
of  the  laborer  by  legislation.  He  was  paid  at  irregular  inter- 
vals, and  if  not  paid  at  all  was  unable  to  secure  his  dues  by  a 
lien  on  the  product  of  his  labor.  The  laws  of  debt  were  par- 
ticularly harsh:  for  indebtedness  in  even  the  smallest  sum  a 
man  could  be  thrown  into  prison  and  kept  there  until  his  debt 
and  the  prison  charges  were  paid.  In  view  of  these  conditions 
it  is  not  surprising  to  find  laborers  organizing  and  endeavoring 
to  secure  redress  for  their  grievances.  At  first  labor  organiza- 
tions were  formed  for  purely  benevolent  purposes,  but  after 
the  year  1800  they  began  to  agitate  for  the  rights  of  labor. 
They  do  not  seem,  however,  to  have  exerted  any  permanent 
influence  on  legislation  during  this  early  period. 

130.  Summary.  —  The  restrictions  placed  by  Great  Britain 
upon  the  economic  development  of  the  American  colonies  led 
almost  inevitably  to  the  Revolution  and  the  severance  of  the 
political  ties  between  the  two  countries.  After  the  achieve- 
ment of  political  independence  the  expectation  of  the  colonists 
was  still  that  they  would  remain  an  agricultural  community 
and  would  carry  on  a  mutually  advantageous  trade  with  Eng- 
lish manufacturers,  exporting  raw  materials  in  return  for  man- 
ufactured commodities.  The  realization  of  this  ideal  was 
prevented  largely  by  England's  own  restrictive  policy,  which 
made  trade  on  equal  terms  between  the  two  countries  impos- 
sible. A  movement  began  for  closer  economic  union  between 
the  vStates.  which  had  hitherto  stood  jealously  apart,  and  for 
the  attainment  of  national  economic  independence. 

Effective  prosecution  of  this  policy  was  barely  beginning 
when  the  outbreak  of  the  Napoleonic  wars  in  Europe  offered 
opportunities  for  profit  in  commerce  and  agiiculture  which 
caused  the  diversion  of  all  energies  into  those  channels. 
While  engaged  in  this  neutral  trade  the  United  States  was 
forced,  in  defense  of  its  rights  upon  the  high  seas,  to  take 
up  arms  again  and  it  chose  to  do  so  against  Great  Britain. 
By  the  conclusion  of  the  War  of  1812,  the  United  States  may 
be  said   to    have   attained^^practically   complete   commercial 


140       ECONOMIC  HISTORY   OF   THE    UNITED  STATES 

independence.  The  struggle  for  national  industrial  independ- 
ence, which  was  inaugurated  by  the  suspension  of  foreign  trade 
during  the, Embargo  and  the  War  of  1812,  characterizes  the 
next  period  rather  than  this  one. 

SUGGESTIVE  TOPICS   AXD   QUESTIONS.     CHAPTER   X 

1.  Did  the  form  of  government  under  the  articles  of  Confederation 
have  any  effect  on  industrial  development?  How?  [Webster,  Gen.  Hist, 
of  Com.,  338-341;  Hart,  Hist,  told  by  Contemp.,  Ill,  chap.  6.] 

2.  What  were  the  effects  of  the  English  industrial  revolution  on  (a) 
output,  (6)  employment,  (c)  wages  and  hours?  [Webster,  Gen.  Hist,  of 
Com.,  216-222;  Price,  Engl.  Ind.  and  Com.,  201-209;  Taylor,  The  Modern 
Factory  System,  chap.  5;  Cheyney,  Introduction,  220-239;  Toynbee, 
The  Industrial  Revolution.] 

3.  Why  did  England  develop  manufactures  at  this  time  rather  than 
France  or  Holland  or  Germany?  [Webster,  Gen.  Hist,  of  Com.,  211-217; 
Hobson,  Evol.  of  Mod.  Cap.,  72-81.] 

4.  Was  the  prohibition  of  the  exportation  of  machinery  by  England 
wise?  Is  it  practised  to-day  by  any  nations?  Why?  [Wright,  Ind.  Evol. 
of  U.  S.,  chap.  4;  Bishop,  I,  37&-8.] 

5.  What  difficulties  did  Samuel  Slater  have  in  introducing  new 
machinery  into  the  United  States,  and  how  did  he  overcome  them? 
[Wright,  Ind.  Evol.,  125;  also  in  Rand,  Econ.  Hist.,  311;  Bishop,  I,  402-3; 
White,  Memoir  of  Samuel  Slater.] 

6.  What  was  the  Annapohs  Convention  and  why  was  it  called  to-  ' 
gether?     Did   it  accomplish  anything?     [Fiske,  Crit.   Per.,  216;   Elson, 
Hist,  of  U.  S.,  324;  McLaughhn,  The  Confed.  and  the  Const.,  179-182; 
Hart,  Hist,  told  by  Contemp.,  Ill,  185-187.] 

7.  Was  protection  intended  in  the  tariff  of  1789,  or  was  it  purely  for 
revenue?  Give  reasons.  [Thompson,  Hist,  of  Tariff,  chap.  I;  Rabbeho, 
117-126;  Stanwood,  I,  chap.  3;  H.  C.  Adams,  Taxa.  in  U.  S.,  1789-1816, 
14-34;  Coman,  138-144;  Hill,  First  Stages.] 

8.  What  clause  in  the  Constitution  gives  Congress  the  power  to  levy 
a  protective  tariff? 

9.  What  was  the  condition  of  manufactures  in  the  United  States  in 
1791,  according  to  Hamilton's  report?  [Hamilton's  Works;  also  in 
Taussig,  State  Papers  and  Speeches  on  the  Tariff,  79-103;  Annals  .of  Congr., 
1791-1793,  971-1034;  Rabbeno,  289-324.] 

10.  What  advantages  did  Hamilton  think  would  result  from  their 
estabhshment  in  the  United  States?  [Taussig,  State  Papers,  15-62;  as 
above.] 

11.  What    caused    the    so-called    whisky    insurrection    of     1793-5? 


INTRODUCTION  OF   MANUFACTURES  l4l 

[Bassett,  The  Federalist  Syst.,  chap.  7;  Howe,  Taxation  in  U.  S.;  Morse, 
Alex.  Hamilton,  II,  chap.  4;  McMaster,  History,  II,  1S9-203.] 

SELECTED   REFERENCES.     CHAPTER  X 

**Bishop:  Histoiy  of  American  Manufactures,  I,  II.  /^ 

__*Comaft7- -Industrial  History  of  the  United  States,  138-151. 
**Hamilton:  Report    on   Manufactures,    in   Taussig's   State    Papers   and 

Speeches  on  the  Tariff,  1-107;  also  in  Works,  in  American  State  Papers 

in  Finance,  and  in  Congressional  Documents. 
*Rabbeno:  American  Commercial  Policy. 
*Taussig:  Tariff  History  of  the  United  States,  1-17. 
*Webster:  General  History  of  Commerce,  337-347. 

Ashley:  Modern  Tariff  History,  Pt.  2,  chap.  1. 

Eighty  Years'  Progress,  274-435. 

Pitkin:  Statistical  View  of  the  United  States,  chaps.  2-4. 

Stanwood:  American  Tariff  Controversies  in  the  Nineteenth  Century,  I, 

chaps.  1-5. 
Winterbotham :  View  of  the  American  United  States,  I,  293-363. 
Wright:  Industrial  Evolution  of  the  United  States,  117-138. 


PART   III 

THE  INDUSTRIAL   REVOLUTION   AND   THE  WEST- 
WARD  MOVEMENT     (1808-1860) 

CHAPTER  XI 

THE  DOMESTICATION  OF  THE  FACTORY  SYSTEM    (1808-1840) 

131.  The  American  industrial  revolution.  —  The  year  1808 
may  be  taken  as  a  convenient  line  of  demarcation  to  distinguish 
the  period  of  industrial  dependence  of  the  United  States  upon 
European  countries  from  that  of  industrial  self-sufficiency  and 
diversified  internal  development.  Colonial  habits  and  occu- 
pations had  predominated  after  the  Revolution  much  as  they 
did  before  it.  In  spite  of  various  efforts  at  manufacturing 
the  country  had  remained  largely. agricultural  and  commercial. 
But  with  the  passage  of  the  Embargo  Act,  the  Non-Inter- 
course Act,  and  finally  the  outbreak  of  the  War  of  1812, 
foreign  trade  was  practically  destroyed  and  the  country 
thrown  back  upon  its  own  resources.  The  domestic  produc- 
tion of  various  commodities,  which  had  previously  been 
imported  from  England,  was  enormously  stimulated  by  this 
period  of  restriction,  and  establishments  for  the  manufacture 
of  cotton  and  woolen  goods,  iron,  glass,  hardware,  and  other 
articles  sprang  up  with  mushroom  rapidity  all  over  the  country. 
As  a  result  of  this  growth  there  developed  a  strong  movement 
for  protection,  to  which  was  joined  later  the  demand  for 
internal  improvments  and  the  rapid  disposal  of  the  public 
lands;  a  comprehensive  policy  was  thus  formulated  for  the 
development  of  the  resources  of  the  country.  The  realiza- 
tion of  this  program  was  achieved  by  improvements  in  manu- 
factures and  in  the  means  of  communication,  and  especially 

142 


THE    DOMESTICATION    OF    THE    FACTORY    SYSTEM     143 

by  the  spread  of  cotton  culture  into  the  Southwest.  It  was 
an  industrial  revolution  which  completely  changed  the  course 
of  internal  development  in  the  United  States,  and  while 
many  years  were  necessary  for  it  to  work  itself  out,  the 
beginnings  may  be  conveniently  marked  by  the  year  1808. 

132.  The  growth  of  manufactures.  —  The  condition  of  manu- 
factures at  the  beginning  of  the  restrictive  period  may  be  seen 
from  a  report  made  by  Gallatin,  the  secretary  of  the  treasury, 
in  1809.  According  to  this,  the  production  of  the  following 
commodities  w^as  ''  adequate  to  the  consumption  of  the  United 
States":  manufactures  of  w^ood,  leather,  soap,  and  tallow 
candles,  spermaceti  oil  and  candles,  flaxseed  oil,  refined  sugar, 
coarse  earthenware,  snuff,  hair  powder,  chocolate,  and  mustard. 
In  addition  to  these,  the  following  enterprises,  which  were 
chiefly  of  recent  development,  were  firmly  established  and 
supplied  a  considerable  part,  if  not  most,  of  the  articles  con- 
sumed: iron  and  its  manufactures;  manufactures  of  cotton, 
wool,  fiax,  and  hemp;  hats;  paper,  printing  types,  printed 
books,  and  playing  cards;  spirituous  and  malt  liquors;  gun- 
powder, window  glass;  jewelry  and  clocks;  manufactures  of 
lead;  straw  bonnets  and  hats;  w^ax  candles.  The  total  annual 
product  of  American  manufactures  was  estimated  to  exceed 
$120,000,000.  It  is  interesting  to  note  the  reasons  given  by 
Mr.  Gallatin  for  the  slow^  progress  of  manufactures  in  this 
country.  TThe  most  important  of  these  were  the  abundance: 
of  land,  tne  high  price  of  labor,  the  scarcity  of  capital,  the" 
greater  profitableness  of  agriculture  and  commerce  during  the/ 
Continental  wars,  and  the  continuance  of  old  habits.)  i 

The  census  of  1810  returned  the  manufactures  of  the  coun- 
try as  $198,613,474,  of  which  the  manufactures  of  textiles,  iron, 
leather,  and  liquors  made  up  about  one  half.  While  these 
figures  are  not  altogether  trustworthy,  they  serve  to  show  in 
some  degree  the  extent  to  which  manufactures  had  developed 
during  this  period.  The  number  of  patents,  too,  kept 
growing  steadily,  237  patents  being  issued  in  1812,  of  which  a 
considerable  number  were  for  apparatus  in  connection  Avith 


144     ECONOMIC    HISTORY    OF    THE    UNITED    STATES 


spinning,  weaving,  and  other  processes  in  the  manufacture 
of  textiles.  Finally,  in  1816,  Mr.  Dallas,  the  secretary  of  the 
treasury,  made  a  report  in  which  he  described  the  industries 

which  had  grown  up  during 
the  war;  of  these  the  principal 
ones  were  textiles,  manufac- 
tures of  iron  and  hardware, 
and  licRiors. 

133.  The  textile  industries. 
—  The  greatest  development 
took  place  in  the  textile  indus- 
tries, especially  in  New  Eng- 
land, where  the  capital  previ- 
ously invested  in  shipping  and 
rendered  idle  by  the  Embargo 
and  the  war  was  now  diverted 
into  manufacturing.  In  1803 
there  were  but  four  cotton 
factories  in  the  country;  five 
3'ears  later  there  were  fifteen 
with  8000  spindles;  by  1811 
the  number  of  spindles  had 
increased  to  80,000,  and  by 
1815  to  500,000.  The  con- 
sumption of  raw  cotton  by 
domestic  manufacturers  shows 
the  same  marvelous  expansion. 
The  figures  were  as  follows: 
in  1800,  500  bales;  1805,  1000 
bales;  1810,  10,000  bales;  1815, 
90,000  bales.  In  this  last 
in    the    combined    cotton    and 


Samuel  Slater 
Slater  learned  the  lousiness  of  cot- 
ton spinning  as  apprentice  in  Ark- 
wright's  firm,  l)ut  having  heard  of 
the  bounties  offered  in  the  United 
States  for  the  introduction  of  Eng- 
lish machinery,  he  emigrated  to 
New  York  in  1 189.  As  the  exporta- 
tion from  England  of  all  machinery, 
models,  or  plans  was  forbidden,  he 
was  compelled  to  memorize  all  the 
mechanical  details.  Upon  his  ar- 
rival in  the  United  States  he  went 
to  Pawtucket.  R.  I.,  where  in  1789 
he  succeeded  in  l)uilding  a  mill  and 
equipping  it  with  the  new  textile 
machinerj^,  constructed  entirely 
from  memory.  The  cotton  man- 
ufacture of  the  United  States  dates 
from  that  time. 

year    the    capital    invested 
woolen  industries  amounted 


to  about  $50,000,000.  A  still 
further  impetus  was  given  to  this  industry  by  the  introduction 
of  the  power-loom  in  1814  by  Francis  C.  Lowell.  He  for  the 
first    time    brought    the    various    processes  -  of    spinning    and 


THE   DOMESTICATIUX  OF    THE  FACTORY   SYSTEM        145 

weaving  under  one  roof,  in  his  factory  at  Walt  ham,  Mass..  which 
lias  therefore  been  called  "the  first  complete  factory  in  the 
world."  While  many  of  the  textile  mills  had  improved 
machinery,  most  of  these  earlier  factories  were  poorly  con- 
structed and  equipped,  and  turned  out  only  the  coarser  grades 
of  products.  The  factory  system  spread  rapidly,  however,  and 
factory  towns  sprang  up  on  the  streams  of  New  England  and 
in  the  Middle  States.  Lowell.  Lawrence,  Holyoke.  Fall  River, 
Cohoes.  and  Paterson  are  examples. 

134.  The  return  of  peace.  —  Upon  the  conclusion  of  peace  it 
was  expected  that  things  would  return  to  much  the  same 
status  as  before.  Importations  of  foreign  comniodin^!^ were 
enormous:  in  1S14  they  were  813,000.000.  ajKTm  1S16,  ^U7.- 
000.000.  The  pent-up  goods  of  Englislymanufacturers  were 
faii\ly  poured  int-6  the  country,  where  t/ney  were  sold  at  low 
prices  and  on  lor^g  credit.  American  merchants  and  consumers 
welc\>med  this  stjream  of  European  luxuries  and  foreign  wares. 
but  tX)  the  mat^facturers  these  enormoii^  importations  meant 
disast^er^Jf^ot  rliin.  At  first,  however. yigriculture  and  com- 
merce found  sucbvlarge  foreign  demand  fir  tJieir  products  that 
the  complaint  of  "the  manufacturer  wa^Simheard  amid  th( 
general  rejoicing.  ShoK^  crops  a ^rOc)fcU obeyed  a  demand^l 
our  ,-dgricult  ural  st  aptes.  \M;ile  i  he  in(Tease^^''htij3orts  aqd^x-'^ 
poi^s~~fUrnished  renumerative'b^isiness  fofTAmerican  shipping. 
The^Tue  state  el^-aff^ui:^^  was  Con^eakd— byTlfe'^iTgh  prices 
resulting  from  a  disordered  currency,  but  in  ISIS  the  currency 
bubble  was  pricked  and  prices  fell  rapidly  to  a  normal  level. 
At  the  same  time  the  position  of  both  agriculture  and  shipping 
was  made  less  secure:  the  corn  laws  of  England  went  into 
effect  in  ISIS  and  deprived  the  American  farmer  of  that 
market,  while  our  commerce  was  prevented  from  expanding 
by  the  commercial  restrictions  imposed  upon  it  by  Eng- 
land. France.  Holland,  and  other  European  (  ■>untries.  As 
the  foreign  market  was  cut  off  there  grew  up  i  demand  for 
the  development  of  a  home  market:  it  was  s.en  that  we 
must  be  more  self-contained.  At  the  same  time  the  struggling 
11 


146       ECONOMIC  HISTORY   OF   THE    UNITED  STATES 

manufacturers    were    demanding    protection    against    foreign 
importations. 

135.  Spread  of  the  factory  system.  —  The  factory  system  of 
manufacture  may  be  said  to  have  obtained  its  first  foothold  in 

►  the  United  States  during  the  restrictive  period  after  the  Em- 
bargo. By  the  factory  system  is  meant  the  concentration  of 
all  the_processes_of  manufacture  in  a  factory,  involving  their 
withdrawal  from  the  household  and  shop  where  they  had  pre- 
viously been  carried  on;  it  involves  also  the  organization  of  the 
workers  under  skilled-^-managefflent ,  ~f or^ stipulated  wages  and 
fixecThours,  with  production  for  the  general  market  and  not 
upon  order.  The  period  was  distinctly  one  of  ''  industrial 
transition  '';  the  use  of  machinery,  which  characterizes  the 
modern  system  of  manufactures,  now  spread  gradually.  After 
the  introduction  of  th^__power-loom  the  manufacture  of  cotton 
and  woolen  goods  paSsed  rapidly  from  the  household  to  the 
mill;  but  the  domestic  and  neighborhood  methods  of  produc- 
tion continued  to  predominate,  even  in  these  industries,  down 
to  about  1830. 

The  patents  for  new  inventions  showed  the  same  tendency 
to  industrial  efficiency:  in  the  period  1790-1811,  these  had 
averaged  77  a  year,  from  1812  to  1817  they  were  192,  while  in 
1830  they  reached  a  total  of  544.  There  was  also  a  considerable 
development  of  companies,  incorporated  and  otherwise,  for  the 
prosecution  of  various  industrial  enterprises,  a  clear  sign  of  the 
growth  of  capitalism.  In  1824  the  capital  authorized  to  manu- 
facturing companies  in  seven  States  amounted  to  $55,289,500. 
Two  years  later  the  amount  of  capital  invested  in  manufac- 
tures in  the  United  States  was  estimated  at  $156,500,000. 

136.  Economic  independence.  —  But  not  merely  was  the 
period  one  of  industrial  development;  the  nation  was  rapidly 
becoming  economically  independent,  and  was  almost  self- 
sufficing.  In  1834  the  total  value  of  all  commodities  manu- 
factured annually  in  the  United  States  was  calculated  at 
$325,000,000,  while  that  of  imported  goods  —  with  the  excep- 
tion of  tea,  coffee,  wines,  and  spices,  which  the  United  States 


THE   DOMESTICATION  OF    THE   FACTORY   SYSTEM        147 

did  not  produce  — was  less  than  $50,000,000.  Within  the 
country  the  factory  system  of  manufacture  had  spread  by 
1840  from  the  textile  to  miscellaneous  industries,  and  begun 
steadily  to  force  from  the  market  the  home-made  products 
with  which  every  community  had  hitherto  chiefly  supplied 
itself.  This  is  seen  in  the  growth  of  the  proportion  of  the 
population  engaged  in  manufactures.  In  1787  Tench  Coxe 
had  estimated  that  less  than  one  eighth  of  the  population 
was  engaged  in  manufactures,  fisheries,  navigation,  and 
trade;  the  census  of  1820  returned  13.7  per  cent,  of  the 
working  population  as  engaged  in  manufacturing  and  the 
mechanic  arts;  in  1840  the  percentage  was  17.1.  It  is  impos- 
sible to  give  any  complete  statement  of  the  growth  of  manu- 
factures during  this  period,  as  no  adequate  statistics  were 
collected  until  1850.  The  census  of  1820  was  so  defective  that 
Congress  never  authorized  its  publication,  while  in  1830  the 
enumeration  of  manufactures  was  altogether  omitted.  In  1820 
the  value  of  manufactures  was  given  as  $52,766,535,  and  in 
1830  as  $112,645,466,  for  ten  States  out  of  twenty-eight;  but 
both  fell  far  short  of  the  mark.  For  1840  the  census  reported 
manufactures  to  the  amount  of  $483,278,215. 

137.  Cotton  manufactures.  —  We  shall  perhaps  get  a  clearer 
idea  of  the  development  of  manufactures  •during  this  period  if 
we  trace  in  more  detail  the  history  of  the  three  most  important 
manufacturing  industries  in  the  United  States  at  this  time  — 
cotton.  wo_den.  and  iroru__puring  the  war,  as  we  have  seen, 
many  cotton  factories  had  been  established  and  the  industry 
gave  employment  to  considerable  capital  and  labor.  This 
industry,  and  particularly  the  iantpxy- methad-£>t  production, 
received  a  great  impetus  from  the  introduction  of  the  power- 
loom  in  1814;  before  this  only  the  spinning  had  been  done  l)y 
machinery,  while  the  weaving  was  done  at  home  by  the  hand- 
loom.  Immediately  after  the  war,  the  immense  importation 
of  foreign  goods  seriously  embarrassed  the  cotton  manufac- 
turers, but,  partly  as  a  result  of  protection  granted  by  suc- 
cessive acts  from  1816  on,  and  partly  from  other  causes,  the 


148       ECONOMIC  HISTORY   OF   THE    UNITED  STATES 

industry  soon  became  profitable  again.  By  1824  cotton 
manufacturing  was  firmly  established;  its  further  development 
was  one  of  steady  growth.  In  that  year  Webster  stated,  "  In 
some  sort  of  fabrics  we  are  already  exporting,  and  the  products 
of  our  factories  are  at  this  moment  in  the  South  American 
markets."  The  fall  in  the  price  of  cotton  cloth  after  factory 
weaving  began  was  remarkable.     ''In  1815,  when  cotton  cloth 


^ 


^ 


r'=^ 


M^  \  -'-  '^_-  ^^r  rfel. 


Spixxixg  Room  in  Slaters'  Mill,  1830 
Samuel  Slater  built  his  first  mill  in  1789  and  equipped  it  with  72 
spindles  and  three  carding  machines  built  on  the  Hargreaves  and 
Arkwright  models.  The  above  cut  shows  his  mill  in  1830  with  the 
most  improved  spinning  machinery.  A  mule  spinner,  carrying 
3.000  spindles,  could  be  operated  by  a  single  person,  who  could 
thus,  with  the  aid  of  machinery,  accomplish  as  much  as  3000  girls 
spinning  by  hand  a  single  thread  at  a  time  on  the  old-fashioned 
spinning-wheel. 

was  still  woven  chiefly  by  hand  —  the  family  weaver  finishing 
only  four  yards  of  cloth  a  day  —  the  price  of  ordinary  cloths 
for  sheeting  was  forty  cents  a  yard.  In  1822  it  had  fallen 
to  twenty-two  cents,  and  in  1829  to  eight  and  one  half 
cents."    In  1850,  when  the  factory  manufacture  had  completely 


THE  DOMESTICATION  OF   THE  FACTORY   SYSTEM        149 

abolished  the  old-time  system,  and  when  the  power-loom  was  in 
full  operation,  the  price  was  reduced  to  seven  cents  a  yard  as 
the  result  of  machine  labor.  That  this  change  of  price  was  due 
chiefly  to  the  use  of  machinery,  and  not  so  much  to  a  fall  in  the 
price  of  cotton,  is  evident  from  a  comparison  of  the  prices  of 
cotton  and  of  cloth. 

From  the  beginning,  the  cotton  industry  led  all  other  manu- 
factures in  the  amount  of  capital  invested,  the  number  of 
persons  employed,  and  the  value  of  the  product.  In  1830  the 
United  States  was  second  only  to  England  in  the  amount  of 
cotton  consumed,  and  exceeded  by  England  and  France  alone 
in  the  number  of  spindles.  The  industry  was  early  localized 
in  the  New  England  States,  especially  Massachusetts;  three 
fourths  of  all  the  cotton  goods  produced  in  1840  were  turned  out 
by  New  England  mills.  In  spite  of  the  great  improvements 
in  this  branch,  however,  the  cotton  factories  were  but  crude 
affairs  compared  with  those  of  to-day;  according  to  Bishop  not 
one  in  a  hundred  factories  in  the  United  States  was  provided 
with  steam,  while  in  England  three  fourths  of  all  the  factories 
used  steam  as  a  motive  power.  The  progress  of  the  cotton 
manufacture  in  the  United  States  is  perhaps  best  set  forth  in 
the  following  table,  and  while  the  figures  cannot  be  considered 
accurate,  they  show  an  enormous  expansion  of  this  industry. 

Cotton  Manufactures,  1805-1831 


Number  of  establishments  . . 
Capital  invested 

Number  spindles  in  factories 
Pounds  raw  cotton  consumed 
Value  manufactured  product 
Number  persons  employed  . 


1805 


4,500 
11,000,000 


1815 


$40,000,000 

130,000 

27,000,000 

$24,300,000 

100,000 


1831 


795 

$40,614,984  ^ 

1,246,503 

77,757,316 

$26,000,000 


62.157 


138.   The  woolen  manufacture.  —  The  woolen  manufacture, 
^  For  1830. 


150       ECONOMIC  HISTORY  OF   THE    UNITED  STATES 

like  that  of  cotton,  had  received  a  considerable  stimulus  during 
the  restrictive  period,  1808-1815,  although  it  had  been  ham- 
pered, unlike  the  cotton  industry,  by  the  lack  of  a  sufficient 
supply  of  domestic  wool,  and  by  taxes  on  the  imported  raw 
material.  The  value  of  factory-made  woolen  goods  is  said  to 
have  increased  from  $4,000,000  in  1810  to  $19,000,000  in  1815. 
After  this  date  woolen  manufacturers,  in  common  with  others, 
had  to  meet  the  competition  of  large  and  cheap  English  im- 
portations. With  only  moderate  protection  from  the  earlier 
tariff  laws,  the  manufactiu'e  steadily  progressed  after  a  few 
years,  and  by  1828  Avas  firmly  established.  The  development 
was  very  similar  to  that  of  cotton,  which  led  the  way;  indeed 
the  textile  machinery  introduced  in  the  cotton  industry  was 
speedily  transferred  to  the  other  branches  of  textile  produc- 
tion. There  was  noticeable  also  the  same  concentration 
of  the  woolen  industry  in  Netv  England.  Improvement  in 
production  lowered  the  cost  and  the  price,  so  that  the  price 
of  a  broadcloth  costing  four  dollars  a  yard  in  1823  had 
by  1841  fallen  one  third;  the  expense  of  weaving  it  was 
decreased  from  fifty  cents  to  fifteen  cents  a  yard.  The 
progress  of  the  manufacture  is  presented,  so  far  as  the  meager 
and  not  very  trustworthy  statistics  permit,  in  the  following 
table: 


Manufactures  of  Woolens, 

1815-1840 

Year 

Number  of 
Establish- 
ments 

Number  of 
Wage  earn- 
ers 

Raw  Mate- 
rial Con- 
sumed 

Value  of 
Product 

Capital 

1815  - 
1840  - 

50,000 
21,342 

$7,000,000 
45,000,000  lbs. 

$19,000,000 
20,696,999 

$12,000,000 
15,765,000 

1420 

139.  The  production  of  iron.  —  The  course  of  events  in  the 
production  of  iron  was  so  similar  to  that  already  described  in 
regard  to  textile  manufactures  that  it  need  not  be  referred  to 
at  length.     During  the  period  from  1808  to  1815  importations 


THE   DOMESTICATION  OF   THE  FACTORY   SYSTEM        151 

were  cut  off  and  a  great  increase  in  the  production  and  manu- 
facture of  iron  took  place.  After  the  conckision  of  peace 
successive  tariff  measures  granted  considerable  protection  to 
the  iron  industry,  and  by  1824  the  pig  iron  product  probably 
exceeded  100,000  tons  annually.  As  long  as  pig  iron  was 
smelted  with  charcoal  the  United  States,  with  its  inexhaustible 
forests  at  the  water's  edge,  had  a  great  advantage,  and  during 
the  colonial  days  had  exported  considerable  pig  iron  to  England. 
But  the  use  of  bituminous  coal,  the  invention  in  1837  of  the 
hot-air  blast,  and  improved  machinery,  had  reduced  the  cost 
in  England  below  the  expense  of  producing  charcoal  iron  in 
this  country.  As  the  forests  were  cut  down  and  wood  became 
scarcer  the  cost  of  production  kept  increasing.  The  iron 
furnaces  were  necessarily  small  affairs  and  produced  from  two 
to  four  tons  of  a  day.  About  1840  the  iron  trade  in  this  coun- 
try was  revolutionized  by  the  substitution  of  anthracite  coal 
for  charcoal. 

140.  The  use  of  anthracite  coal.  —  The  use  of  anthracite 
had  long  been  known:  as  early  as  1768  an  ingenious  black- 
smith in  the  Wyoming  valley  is  reported  to  have  used  it  locally, 
and  some  years  later  several  ''  ark  "  loads  were  floated  down 
the  Schuylkill  to  Philadelphia.  The  difficulties  of  trans- 
portation, how^ever,  prevented  its  general  use.  Gradually,  its 
possibilities  became  known;  in  1825  the  first  successful  attempt 
was  made  to  generate  steam  with  anthracite  coal,  and  in  1837 
the  first  furnace  for  smelting  iron  with  anthracite  was  built. 
The  real  development  took  place  after  1840.  But  even  in 
the  decade  1830-1840  the  improvement  in  the  means  of  com- 
munication by  the  building  of  railroads  made  the  deposits 
available,  and  at  the  same  time  created  a  demand  for  iron. 
The  first  important  demand  for  iron  for  railroad  purposes  began 
about  1835,  in  which  3rear  465  miles  of  road  were  constructed. 
The  total  number  of  all  furnaces  in  the  United  States  in  1840 
was  804,  and  of  these  one  half  were  in  the  two  States  of  Penn- 
sylvania and  New  York.  Including  miners,  the  entire  business 
employed  upwards  of  30,000  persons,  and  a  capital  of  nearly 


152       ECONOMIC  HISTORY   OF   THE    UNITED  STATES 


$20,500,000.     The  progress   of  the  industry  is  shown  in  the 
following  table: 

Iron  Manufactures,  1810-1840 


Pig  Irox 

Iron  Castings 

Wrought  Iron 

Year 

Amount 
in  tons 

Value 

Amount 
in  tons 

Value 

Amount 
in  tons 

Value 

1810.. 
1820.. 
1830.. 
1840.. 

54,000 

20,000 

165,000 

315,000 

$3,616,457 
2,230,276 
4,757,403 
7.172,575 

Included  in  pig  iron 
Included  in  pig  iron 

Tr»r»lnrlpr1    iti   t^io*  irr;7i 

$10^998,086 

4,640,669 

16  737  2=)1 

286,904  1 

$9,916,442 

197,233 

11,820,145 

141.  Tariff  from  i8i6  to  1824.  —  When  the  conclusion  of 
peace  in  1815  opened  the  ports  of  the  United  States  to  foreign 
importations  it  was  generalh^  felt  that  the  industries  which 
had  grown  up  during  the  period  of  restriction  were  entitled  to 
a  fair  measure  of  protection.     Accordingly  a  general  tariff  bill 

I  was  enacted  April  27,  1816.  The  new  textile  industries,  which 
were  especially  threatened  by  English  competition,  were  granted 
a  duty  of  25  per  cent,  until  1819,  and  after  that  20  per  cent. 
Other  goods,  such  as  hats,  cabinet  wares,  manufactured  wood, 
carriages,  leather  and  its  manufactures,  paper,  and  sugar,  were 
also  given  a  measure  of  protection.  This  act  has  usually  been 
considered  as  the  beginning  in  the  United  States  of  the  pro- 
tective policy;  while  the  earliest_tariffs  may  have  gi\^n_pro- 
tectjomjt  was  stricth^  incidental  to  revenue  purposes,  but  here, 
for  the  first  time,  industrial  and  not  fiscal  needs  determined 
the  choice  of  articles  and  rates.  There  was.  however,  also  the 
necessity  of  greater  revenue  for  the  payment  of  the  heavy  debt 

jN'hich  had  been  contracted  during  the  war.     The  debate  or 
the  tariff  of  1816  was  based  on  the  broad  question  of  the  rela 
tive  merits  of  free  trade  and  protection;  since  then,  the  dis 
cussion  has  more  and  more  become  a  contest  over  the  scale  of 
rates  merely.     The  vote  on  the  measure^  too,  was  by  no  means 


THE  DOMESTICATION  OF   THE  FACTORY   SYSTEM        153 

sectional;  even  the  South  generously  voted  for  protection. 
After  this  measure  successive  acts  extended  the  protective 
policy:  the  act  of  1818  granted  protection  to  the  iron  industry 
and  extended  the  25  per  cent,  duty  on  cottons  and  woolens 
until  1826. 

142.  Tariff  from  1824  to  1842.  —  In  1824  the  list  of  pro- 
tected goods  was  greatly  expanded  and  now  included  wool, 
iron,  hemp,  lead,  and  glass,  in  addition  to  textile  manufactures; 
duties  were  also  raised  on  silk,  linens,  cutlery,  and  spices.  In 
this  act  protection  was  given  the  agricultural  and  extractive 
interests  of  the  western  and  middle  States,  which  were  won 
over  by  the  "  home-market  "  argument. 

This  section  was  now^  the  stronghold  of  the  new  movement; 
the  South  had  already  changed  her  attitude  and  taken  a  strong 
stand  against  it,  while  New  England  was  divided.  Agitation 
for  still  higher  protection,  headed  by  the  woolen  manufacturers, 
led  to  the  passage  of  the  act  of  1828,  which  may  be  said  to 
represent  the  high-water  mark  of  protective  legislation  before 
the  Civil  War.  It  was  passed  by  the  aid  of  New  England, 
where  the  manufacturing  now  outweighed  the  shipping  in- 
terests, but  led  to  bitter  opposition  in  the  South.  Of  this 
tariff  John  Randolph  sarcastically  said,  "  it  referred  to  manu- 
factures of  no  sort  or  kind  except  the  manufacture  of  a  Presi- 
dent of  the  United  States."  The  abominations  of  the  act  of 
1828  led  to  a  reaction  which  found  expression  in  the  moderate 
policy  of  the  tariff  of  1832,  practically  restoring  rates  to  where 
they  had  been  in  1824.  This  soon  gave  way  in  turn  to  the 
so-called  compromise  tariff  of  1833.  The  determined  opposition 
of  the  South,  culminating  in  the  nullification  program  of  South 
Carolina,  required  concession  from  the  extreme  protectionists 
of  the  North.  As  finally  passed,  the  act  of  1833  provided  for 
a  gradual  reduction'of  all  duties  exceeding  20  per  (^nt.  in  the 
tariff  of  1832  to  a  general  level  of  20  per  cent.;  by  1842  the  re- 
duction had  actually  taken  place. 

143.  Industrial  unrest.  —  The  growth  of  manufactures  and 
the  prosecution  of  great  works  of  internal  improvement  had 


154       ECONOMIC  HISTORY   OF   THE    UNITED  STATES 

called  into  existence  a  large  and  growing  class  of  factory  oper- 
atives and  skilled  artisans,  and  had  also  created  a  demand  for 
unskilled  labor.  Thousands  of  young  men  and  women  had 
been  drawn  from  the  farms  into  the  growing  cities,  and  thou- 
sands more  had  come  to  this  country  from  the  Old  World. 
By  1840  there  w^ere  forty-four  cities  in  the  United  States  with  a 
population  of  over  8000  inhabitants.  ''  That  these  men  should 
be  content  to  live  under  the  old  conditions  of  labor  was  not  to 
be  expected.  The  long  hours  of  labor,  the  liability  of  im- 
prisonment for  debt,  which  still  lingered  in  many  States,  the 
need  of  a  lien  law  by  which  they  might  retain  the  commodities 
on  which  they  worked  to  the  amount  of  their  unpaid  wages, 
the  impossibility  of  educating  their  children  in  a  land  where 
education  counted  for  so  much,  were  to  them  grievances  of  a 
serious  kind.  The  first  quarter  of  the  nineteenth  century, 
therefore,  had  scarcely  passed  when  a  great  movement  began 
in  the  manufacturing  States  for  the  rights— aU^hor^"  The 
general  unrest  was  crystallizedand~^iven  definite  form  by 
the  Evans  brothers,  who  in  1825  began  the  publication  of  the 
"  Workingman's  Advocate/'  probably  the  first  labor  paper  in 
the  United  States.  The  visit  of  Robert_(lii:^n  to  this  country 
at  this  time  gave  a  socialistic  and  fantastic  turn  to  the  efforts 
of  the  working  people  to  improve  their  condition,  and  vari- 
ous communistic  societies  were  formed  at  New  Harmony, 
Indiana,  and  elsewhere.  The  real  labor  movement  lay  deeper, 
however,  and  continued  after  the  failure  of  these  schemes, 
concerning  itself  with  more  immediately  practical  aims. 
Organization  became  more  general,  demands  were  made 
for  higher  wages  and  for  the  introduction  of  a  ten-hour 
day,  and  strike's^became  common,  although  under  the  com- 
mon law  the  strikers  were  usually  arrested  and  fined  for 
conspiracy.  A  great  step  forward  was  made  when  President 
Van  Buren^in  1840  introduced  the  ten-hour  system  into  the 
navy-yard  at  Washington,  and  in  all  public  establishments. 
This  example  was  followed  slowly  by  private  firms,  and  marks 
the  beginning  of  a  great  improvement  in  the  condition  of  labor. 


THE  DOMESTICATION   OF   THE  FACTORY   SYSTEM        155 


SUGGESTIVE  TOPICS  AND   QUESTIONS.     CHAPTER  XI 

1.  What  are  the  chief  characteristics  of  the  factory  system;  the 
differences  between  it  and  the  domestic  system?  [Cheyney,  Introduction, 
213;  Taylor,  Hist,  of  the  Factory  System;  Ashley,  The  Early  Hist,  of  the 
Woollen  Industry,  in  Publ.  Amer.  Econ.  Ass.,  II,  366-380;  Wright,  in 
Tenth  Census  (1880),  II,  537.] 

2.  Did  the  industrial  revolution  in  the  United  States  lead  to  such 
bad  results  as  in  England?  Why  not?  [American  State  Papers,  Finance, 
II,  666-689;  Coman,  180-185;  Bishop,  II,  chap.  3;  Ely,  Outhnes  of  Econ., 
55.] 

3.  Describe  the  processes  of  the  manufacture  of  cotton  goods.  [Bag- 
nail,  The  Textile  Industries  of  the  U.  S.] 

4.  Why  did  New  England  take  the  lead  in  manufacturing?  [Weeden, 
see  Index;  Coman,  180.] 

5.  What  were  the  conditions  in  New  England  textile  factories  in  the 
thirties?  [Wright,  Some  Ethical  Phases  of  the  Labor  Problem,  74;  Mar- 
tineau,  Society  in  America.] 

6.  What  objections  may  be  urged  against  the  factory  system?  Are 
they  conclusive?  [Wright,  in  Tenth  Census  (1880),  II,  537;  Wright,  Some 
Ethical  Phases,  chap.  3.] 

7.  Describe  the  early  experiments  with  the  use  of  anthracite  coal. 
[NicoUs,  Story  of  Amer.  Coals,  chap.  4.] 

8.  Why  was  the  tariff  of  1828  called  the  "tariff  of  abominations"? 
[Taussig,  Tar.  Hist.,  88;  Dewey,  Fin.  Hist.,  176;  Bolles,  Fin.  Hist.,  II, 
393-409.] 

9.  Albert  Gallatin  in  the  Free  Trade  Memorial  of  1832  said  that  a 
protective  tariff  involves  a  national  loss.  What  did  he  mean?  Is  it  true? 
[Taussig,  State  Papers  and  Speeches  on  the  Tariff,  108-213;  Bullock, 
Introduction,  355;  Sumner,  Protectionism,  16,  17.] 

10.  Why  did  the  South  oppose  protection?  [Wilson,  Div.  and  Re- 
union, 39-61;  Dewey,  chap.  8;  Bolles,  Fin.  Hist.,  II,  363-7;  Taussig,  Tar. 
Hist.,  73.] 

11.  What  was  the  nuUification  ordinance  of  South  CaroHna,  and  its 
relation  to  the  tariff?  [Stanwood,  I,  386;  MacDonald,  Select  Docu- 
ments, 231-237;  Sumner,  Jackson,  281-291;  Schurz,  Clay,  II,  1-22; 
McDonald,  Jacksonian  Democracy,  chap.  9;  Houston,  Nullification  in  So. 
Car.^ 

12.  Describe  Robert  Owen's  reforms  in  New  Lanark.  Scotland. 
[Kirkup,  Hist,  of  Sociahsm,  58;  Sargant,  Robert  Owen;  Booth,  Life  of 
Robert  Owen.] 

13.  What  communistic  society  was  started  by  Robert  Owen  in  this 
country?     Did  it  succeed?     W^hy?     [Noyes,  Hist,  of  Amer.  Sociahsms, 


156       ECONOMIC  HISTORY   OF   THE    UNITED   STATES 

chaps.  2-4;  Sargant,  Robert  Owen,  chaps.  20-22;  Booth,  Life  of  Robert 
Owen;  R.  D.  Owen,  Autobiography,  chaps.  3,  8,  9.] 

14.  How  has  the  introduction  of  machinery  changed  the  relations  of 
workman  to  master?     [Hobson,  Evolution  of  Mod.  Cap.,  34-43.] 

15.  Are  the  opportunities  for  employees  to  rise  to  the  rank  of  em- 
ployers as  great  as  they  were  75  or  100  years  ago? 

SELECTED   REFERENCES.     CHAPTER  XI 

**Bishop:  History  of  American  Manufactures,  II,  117-298. 
*Coman:  Industrial  History  of  the  United  States,  180-193. 
**Rabbeno:  American  Commercial  Policy,  146-155,  287-324 
*Turner:  The  Rise  of  the  New  West,  chaps.  14,  19. 
**Taussig:  Tariff  History, of  the  United  States,  17-67. 
**Woodbury:  Report    on    the    Cultivation,    Manufacture,    and    Foreign 
Trade  of  Cotton. 

Ashley:  Modern  Tariff  History,  160-174. 

Gallatin:  Report  on  Manufactures,  in  Taussig's  State  Papers  and  Speeches 

on  the  TarifT,  109-213;  also  in  Writing's,  in  Niles's  "Register,"  in 

Raguet's  Banner  of  the  Constitution,  and  in  Congressional  Documents. 
McMaster:  History  of  the  People  of  the  United  States,  IV,  chaps.  21,  31. 
Stanwood:  American  Tariff  Controversies  in  the  Nineteenth  Century,  I, 

chaps.  5-10. 
Swank:  History  of  Iron  in  all  Ages,  chaps.  19,  20. 
Webster:  Works,  III,  94  (Speech  on  Tariff  of  1824);  224  (Tariff  of  1828); 

also  in  Taussig's  State  Papers  and  Speeches  on  the  Tariff,  317-385. 


CHAPTER  XII 
THE   GROWTH   OF  THE  FACTORY  SYSTEM  (i  840-1 860) 

144.  The  culmination  of  the  small  industry.  —  The  period 
beginning  with  1840  opened  under  circumstances  of  great  depres- 
sion for  manufactures,  as  a  resuh  of  the  crisis  of  1837.  The 
check  was  only  temporary  and  industry  soon  revived,  for  the' 
prosperity  of  the  country  rested  upon  too  solid  and  broad  a' 
foundation  to  be  permanently  retarded.  New  industries  were 
soon  developed,  machinery  was  employed  more  and  more,  and 
American  manufacturers  were  prompt  to  adopt  new  industrial 
methods.  There  was  a  wide  diffusion  of  petty  manufacturing « 
and  mechanical  establishments  in  every  settled  part  of  the 
country  and  a  rapid  increase  in  the  total  number  of  such 
enterprises.  The  census  of  1840  showed  probably  the  greatest 
development  of  small  manufacturing  industries  which  the 
country  has  ever  seen;  after  this  period  concentration  and 
combination  reduced  the  number  of  establishments,  not  only 
relatively  to  the  population,  but  in  some  industries,  as  cotton 
sand  steel,  even  absolutely.  The  tendency  to  diffusion  of  manu- 
facturing establishments  as  the  population  spread  out  over 
a  wider  territory  was  not  as  yet  counteracted  by  the  move- 
ment toward  concentration,  which  followed  the  improvement 
of  transportation  facilities.  There  was  a  tremendous  outburst 
of  energy  along  all  lines  of  economic  activity,  to  which  a 
number  of  forces  contributed  and  which  combined  to  make  this 
an  era  of  unprecedented  prosperity  and  industrial  expansion. 

145.  The  patent  system.  —  Foremost  among  the  causes  of  , 
our  industrial  growth  must  be  mentioned  the  patent  system  of 
the   United    States,   under   which   the   number   of  inventions 
patented  had  steadily  increased  from  306  in  the  decade  ending 

157 


158       ECONOMIC  HISTORY   OF   THE    UNITED  STATES 

in  1800  to  5942  in  the  decade  ending  in  1850,  and  to  the  enor- 
mous number  of  23,140  in  the  following  ten  years.  In  1849, 
for  the  first  time,  the  number  of  patents  issued  in  a  single  year 
passed  the  one  thousand  mark,  and  only  three  times  afterwards 
fell  below  that  number.  The  annual  number  steadily  increased 
until  in  1860  it  reached  4819.  We  have  already  noticed  the 
number  of  patents  as  an  index  of  progress,  but  have  not 
inquired  into  the  system  under  which  they  were  granted;  we 
may  profitably  do  so  at  this  point. 

Provision  was  first  made  by  Congress  in  1790  for  giving  to 
inventors  the  exclusive  right  to  their  discoveries.  The  term 
for  which  a  patent  w^as  valid  w^as  fourteen  years,  and  after  1836 
an  extension  of  seven  years  was  permitted  in  certain  cases;  in 
1870  the  original  term  was  extended  to  seventeen  years.  This 
term  is  longer  than  that  granted  by  the  patent  law^  of  any 
other  country.  Every  patent  contains  a  grant  to  the  patentee 
of  the  exclusive  right  to  make,  use,  and  vend  the  invention  or 
discovery  throughout  the  United  States,  and  is  granted  on 
filing  a  claim  and  specifications  and  paying  certain  small  fees. 
Patents  are  also  granted  for  designs  and  trade-marks  as  well 
as  for  machines. 

146.  Directions  of  inventive  activity.  —  Most  of  the  inven- 
tions for  which  patents  were  issued  during  this  period  con- 
sisted of  labor-saving  devices,  the  application  of  machinery 
to  industrial  processes,  and  new  processes  which  simplified 
methods  and  reduced  cost.  Periods  of  depression,  such  as 
that  following  the  panic  of  1857,  have  generally  resulted  in  a 
stimulation  of  inventive  genius  and  a  large  increase  in  the 
number  of  patents.  But  the  inventions  of  this  period  were 
not  merely  of  new  machinery;  they  w^ere  largely  of  a  utili- 
tarian character  and  included  man}^  of  the  improvements 
which  have  raised  the  general  standard  of  comfort  in  this 
country.  "  They  related  to  improvements  in  looms  for  pro- 
ducing figured  fabrics;  to  air-heating  stoves,  cooking  stoves, 
musical  instruments,  firearms,  sewing  machines,  printing 
presses,  boot  and  shoe  machinery,  rubber  goods,  floor  cloths, 


THE  GROWTH  OF   THE  FACTORY   SYSTEM  159 

and  thousands  of  other  inventions  tending  to  raise  and 
improve  the  standard  of  living  of  the  people." 

The  following  extract  from  an  inquiry  made  b}^  the  House 
of  Commons  in  1841  gives  an  English  view  of  Yankee  invent- 
iveness: ''  I  should  say  that  the  greatest  portion  of  new  inven- 
tions lately  introduced  in  this  country  have  come  from  abroad 
....  I  apprehend  that  a  majority  of  the  really  new  inven- 
tions, that  is,  of  new  ideas  altogether  in  the  carrying  out  of  a 
certain  process  by  machinery,  or  in  a  new  mode,  have  ori- 
ginated abroad,  especially  in  America." 

The  magnetic  telegraph,  invented  in  1835,  was  first  prac- 
tically applied  in  1844,  and  in  1846  the  sewing  machine  was 
invented  —  two  of  the  most  important  inventions  of  the 
century.  The  manufacture  of  American  edge  tools  began; 
the  invention  of  planing  machines  revolutionized  woodworking; 
in  1842  the  Xasmyth  steam  hammer  was  invented,  and  in 
1847  the  rotary  printing  press.  Piece  by  piece,  in  response  to 
industrial  needs,  the  mechanical  appliances  were  being  per- 
fected which  made  possible  the  enormous  production  of  the 
completed  factory  system,  and  its  concentration  under  skilled 
and  centralized  direction. 

147.  Other  factors  of  industrial  progress.  —  Other  factors 
which  aided  in  the  industrial  development  of  this  period  were 
the  growth__of  population,  the  increase  in  immigration,  the 
extension  of_railways.  the  abrogation  of  the  i^nglish  corn 
laws,  the  discoverv^pf  gokl  in  California^  and  the  taking  up 
of  western  lands.  The  mere  growth  in  numbers  led  to  a 
considerable  expansion  in  manufacturing,  by  adding  to  the 
number  of  workers  and  by  creating  a  vastly  increased  demand 
for  the  products  of  American  manufactures.  Not  only  was 
the  West  built  up  and,  its  marvelous  resources  made  produc- 
tive, but  the  population  in  the  eastern  manufacturing  cities 
increased  rapidly.  While  the  total  population  of  the  country 
increased  from  17,069,453  in  1840  to  31,443,321  in  1860,  the 
number  of  cities  of  8000  inhabitants  and  over  rose  from  44 
to  141,  and  the  urban  population  from  8.5  per  cent,  to  12.5 


160       ECONOMIC  HISTORY   OF   THE    UNITED  STATES 

per  cent,  of  the  whole.  Such  an  increase  in  numbers  alone 
would  have  greatly  influenced  our  industrial  growth,  but  at 
the  same  time  there  was  going  on  a  territorial  expansion 
and  development  of  the  western  territory  that  added  greatly 
to  the  wealth  of  the  country.  The  abrogation  of  the  English 
corn  laws,  by  opening  a  profitable  market  to  the  American 
farmer,  made  him  a  better  purchaser  of  manufactured  goods. 
This  growth  is  reflected  in  the  census  flgures  of  manufac- 
tures for  this  period.  In  1850,  for  the  first  time,  the  annual 
value  of  manufactures  jDassed  that  of  agriculture,  the 
value  of  the  products  being  respectively  $1,055,500,000  and 
$994,000,000;  but  in  1860  the  primacy  of  agriculture  was 
again  restored,  the  products  being  respective!}^  $1,885,862,000 
and  $1,910,000,000  for  that  year. 

148.  General  prosperity.  ■ —  There  is  general  agreement 
among  all  writers  as  to  the  great  industrial  advance  made  in 
the  United  States  during  this  period;  it  was  a  time  of  solid 
prosperity  and  steady,  continuous  progress.  Sumner  calls  it 
f  i^^Sthe  golden  age."  The  Avealth  of  the  country  increased  126 
"^  ^  per  cent.,  and  with  it  the  general  well-being  of  the  people,  so 
that  comfort  was  widespread  and  pauperism  almost  unknown. 
The  Avealth  of  the  country  was  as  yet  very  equally  distributed; 
if  the  poor  were  few,  the  number  of  the  very  rich  was  still 
smaller.  Near  the  end  of  this  period,  Sir  Morton  Peto  wrote 
of  this  point:  '^  On  their  return  from  the  United  States  trav- 
elers are  not  infrequently  asked  what  feature  struck  them 
most  favorably  in  their  journey  through  the  country.  Look- 
ing to  the  territory,  I  should  certainly  answer  to  such  a  ques- 
tion, its  wide  expanse  and  its  abundant  resources;  but  looking 
to  the  people,  I  should  say,  the  absence  of  pauperism.  Nothing 
is  more  striking  to  a  European  than  the  universal  appearance 
of  respectability  of  all  classes  in  America.  You  see  no  rags, 
you  meet  no  beggars." 

The  prosperity  of  this  period  was  interrupted  by  the  brief 
but  severe  panic  of  1857,  which  was  occasioned  by  speculation, 
over-expansion   of  bank  credit,  and  too  rapid  investment  of 


THE  GROWTH  OF   THE  FACTORY   SYSTEM 


161 


fixed  capital  in  factories  and  mills,  with  consequent  increased 
output  of  goods.  But  the  country  quickly  recovered  from 
the  resulting  depression  of  less  than  a  year's  duration,  and  the 
census  returns  of  1860  showed  no  effects  from  thia  cause  what- 
ever. 

149.  Growth  of  manufactures.  —  In  1850  the  Federal  gov- 
ernment for  the  first  time  made  an  accurate  census  of  the 
manufactures  of  the  country.  Products  of  small  shops  and 
establishments  producing  less  than  $500  each  yearly  were  not 
included;  but  this  domestic  or  hand  industry  probably  amounted 
to  $100,000,000.  more.  The  following  table  shows  the  impor- 
tant facts  for  the  years  1850  and  1860: 

Growth  of  Manufactures   (including  lumber  and  fisheries) 


Year 

Number  of 
Establish- 
ments 

Capital 

Number 

of 

Employees 

Cost 

of  Raw 

Materials 

Value 

of 

Products 

1850 
1860 

123,025 
140,433 

$533,245,000 
1,009,856,000 

957,059 
1,311,246 

$555,124,000 
1,031,605,000 

$1,019,107,000 
1,885,862,000 

Six  sevenths  of  this  amount  in  1850  was  made  in  fifteen 
States,  chiefly  in  New  England,  which  from  the  beginning  had 
taken  first  rank  as  the  seat  of  the  manufacturing  industries. 
New  York  at  this  time,  however,  held  first  position;  Massa- 
chusetts and  Pennsylvania  were  next  in  order.  The  par- 
ticular industries  were  generally  diffused  throughout  the 
whole  country,  though  even  at  this  early  date  there  was 
some  localization:  bonnets  and  straw  goods,  boots  and  shoes, 
and  cottons  were  concentrated  largely  in  Massachusetts;  hard- 
ware and  rubber  goods  in  Connecticut;  coal  and  iron  in  Penn- 
sylvania; calicoes  in  Rhode  Island;  turpentine  in  North 
Carolina;  lard  in  Ohio;  and  lead  in  Wisconsin.  The  largest 
single  manufacturing  industry  —  flour  and  meal  —  was  closely 
allied  to  agriculture;  indeed,  many  industries  were  but  one 
or  two  degrees  removed  from  the  extractive  industries. 
12 


162       ECONOMIC  HISTORY   OF   THE    UNITED   STATES 

Flour  and  meal  was  the  only  industry  which  produced  over 
$100,000,000  annually;  three  others,  namely,  boots  and  shoes, 
cotton,  and  lumber,  produced  over  $50,000,000  each;  while 
clothing,  machinery,  leather,  and  woolens  amounted  to  be- 
tween $25,000,000  and  $50,000,000. 

150.  Cotton  manufacturing.  —  The  industrial  progress  of 
this  period  can  best  be  traced  in  the  separate  industries,  and 
for  this  purpose  we  may  turn  again  to  a  more  detailed  account 
of  three  typical  manufacturing  interests.  The  cotton  industry 
was  in  1840,  as  it  is  now,  the  leading  branch  of  pure  manufac- 
tures, and  showed  a  steady  growth  until  the  outbreak  of  the 
Civil  War.  The  possession  of  vast  and  cheap  supplies  of  the 
raw  material  gave  us  an  advantage  over  all  competitors,  while 
the  handicap  of  lack  of  improved  machinery  was  being  rapidly 
overcome.  By  1850  the  industry  had  grown  so  in  New  Eng- 
land, that  the  ratio  of  spindles  to  the  population  was  slightly 
greater  than  in  Great  Britain;  to  each  1000  of  the  population 
it  was  respectively  1008  and  1003.  And  during  the  next  decade 
the  number  of  spindles  increased  faster  than  the  population. 
The  progress  of  cotton  manufacturing  can  be  l^est  shown  in 
the  following  brief  tabular  comparison: 

Growth  of  Cotton  Manufactures,   1840-1860 


1840 


1850 


1860 


Number  of  establishments 

Capital  invested 

Number  of  spindles  in  factories 
Pounds  of  raw  cotton  consumed 
Value  of  manufactured  product 
Hands  employed 


1240 

$51,102,259 

2,284,000 

126,000,000 

$46,350,453 

72,119 


1074 
$76,032,578 
3,634,000 

$65,501,687 
94,956 


1091 

$98,585,000 

5,235,727 

422,704,975 

$115,681,774 

120,000 


By  1860  cotton  manufacture  had  reached  a  high  stage  of 
development.  Six  sevenths  of  the  cotton  goods  used  in  this 
country  were  made  here,  only  the  finer  grades  being  imported 
to   the   amount   of   about   $25,000,000   annually.     There   was 


THE  GROWTH  OF   THE  FACTORY   SYSTEM 


163 


already  an  exportation  of  cottons  to  the  Orient,  amounting  to 
six  or  seven  million  dollars'  worth  yearly,  and  the  outlook  for 
a  large  expansion  of  trade  seemed  promising, 

151.  The  wooien  industry.  —  The  manufacture  of  woolens 
did  not  develop  as  rapidly  as  that  of  cotton  goods;  in  fact, 
until  about  1830  there  had  been  little  progress  in  this  branch. 
By  1840,  however,  it  had  made  a  good  start,  and  the  adapta- 
tion of  the  power-loom  to  the  manufacture  of  hosiery,  carpets, 
and  other  branches  of  the  woolen  manufacture  gave  it  a  con- 
siderable impetus.  The  development  occurred  chiefl}^  in  the 
middle  States,  where  the  wool  was  grown;  one  half  of  the  woolen 
mills  in  1850  were  in  Pennsylvania,  New  York,  and  Ohio. 
As  in  the  case  of  the  cotton  industry,  the  seat  of  the  manu- 
facture remained  in  New  England,  where  about  two  thirds  of 
ihe  product  was  manufactured.  This  industry  in  the  United 
States  has  always  been  hampered  by  the  lack  of  a  sufficient 
domestic  supply  of  raw  wool,  and  during  this  period  the  annual 
wool  clip  fell  far  short  of  the  needs  of  manufacturers.  The 
following  table  shows  the  progress  of  the  industry  from  1840 
to  1860: 

Progress  of  Woolen  Manufactures,   1840-1860 


1840 


1850 


1860 


Number  establishments 

Capital  invested 

Hands  employed 

Value  of  products 


$15,765,000 

21,342 

$20,697,000 


1675 
$31,971,631 
45,438 

$48,608,779 


1476 
$38,814,422 
50,419 
$73,454,000 


152.  Iron  production.  —  The  iron  industry  ranked  third  in 
the  amount  of  capital  invested  in  1840,  being  exceeded  only  by 
the  cotton  manufacture,  and  flour,  grist,  and  saw  mills.  As 
was  pointed  out  in  a  previous  paragraph,  various  improvements 
during  the  decade  1830-40  had  greatly  stimulated  the  produc- 
tion of  iron,  which  had  increased  from  nearly  300,000  tons  in 
1840-41  to  about  650,000  tons  in  1846-47.     The  most  important 


164       ECONOMIC  HISTORY   OF   THE    UNITED  STATES 


change  had  been  the  introduction  of  anthracite  for  smelt- 
ing, an  innoviition  which  effected  a  revolution  in  the  whole 
iron  industry  of  the  country.  The  manufacture  of  iron  was 
greatly  increased;  districts  which  had  been  decreasing  their 
production  because  of  a  scarcity  of  charcoal  now  extended 
their  production,  while  new  regions  began  sending  iron  to  the 
market;  and  the  cheapening  of  prices  stimulated  consumption 
and  permitted  the  use  of  iron  in  entirely  new  lines.  The  rapid 
extension  in  its  use  is  shown  by  the  increase  in  the  number  of 
anthracite  furnaces:  in  1840  there  were  only  6  in  the  United 
States;  in  1856  there  were  121. 

After  the  introduction  of  anthracite  as  fuel  other  improve- 
ments began  to  be  made:  the  necessity  of  improving  the  blast 
soon  led  to  the  apiDlication  of  steam  instead  of  water  power *to 
the  blowing  of  American  furnaces ;  the  combustible  gases  emitted 
from  the  furnaces  were  also  used  to  heat  the  blast.  About 
1850  the  use  of  coke  began  in  the  United  States,  and  a  little 
later  uncoked  bituminous  coal  was  used.  These  did  not  assume 
much  importance,  however,  until  after  1860,  and  did  not  sur- 
pass anthracite  as  fuel  until  1875.  The  following  table  shows 
the  change  that  was  taking  place  in  the  methods  of  iron  pro- 
duction, and  especially  the  shifting  from  charcoal  to  anthracite: 

The  Production  of  Iron,  by  Kinds  of  Fuel  Used 


Year 

Anthracite 

Charcoal 

Bituminous 

Total  net  tons 

1842... 
1848... 
1855. . . 
1860... 

230,000  ^ 
650,000  ^ 
784,178 
919,770 

381,866 
519,211 

339,922 

278,331 

62,390 
122,228 

153.  Manufactures  of  iron.  —  The  use  of  anthracite  stimu- 
lated not  only  the  production  of  pig  iron,  but  also  iron  manu- 
factures. Rolled  iron,  which  had  previously  been  imported, 
was  produced  in  this  country  after  1844,  when  anthracite  began 

^  Gross  tons ;  others  net. 


THE  GROWTH  OF    THE  FACTORY   SYSTEM  165 

to  be  used  in  puddling  and  other  processes,  and  by  1856  its 
production  had  reached  nearly  500,000  tons  a  year.  Up  to 
1844  there  were  practically  no  facilities  for  manufacturing  the 
iron  rails  needed  for  the  4185  miles  of  railroad  in  the  United 
States,  and  until  the  tariff  act  of  1842  they  were  imported  from 
England  free  of  duty.  Beginning  with  about  1844,  however, 
iron  rails  were  made  in  this  country,  and  with  the  exception 
of  a  temporary  setback  in  1857  showed  substantial  progress 
up  to  1860.  The  production  of  iron  rails  is  given  by  Swank 
as  follows: 

1849 24,000  tons 

1853 87,864  tons 

1856 180,018  tons 

1860 205,038  tons 

It  is  clear  from  these  figures  that  the  iron  industry  of  the 
country  was  only  in  its  infancy  and  that  the  inexhaustible 
mineral  resources  of  the  country  were  as  yet  practically  un- 
developed. Nevertheless,  in  1860,  there  was  produced  pig 
iron  to  the  value  of  $20,870,120;  forged,  rolled,  and  wrought 
iron  to  the  amount  of  $36,537,259;  and  cast  iron  of  all  kinds 
to  the  amount  of  $36,638,073.  Even  more  important  was  the 
manufacture  of  machinery,  which  was  turned  out  in  this  same 
year  to  a  value  of  over  $50,000,000,  in  addition  to  $17,000,000 
of  agricultural  implements,  $11,000,000  of  hardware,  and 
$3,000,000  of  edge  tools  and  axes. 

154.  Other  manufacturing  industries.  —  The  important  in- 
dustries which  were  developed  during  this  period,  the  value  of 
whose  product  in  1860  exceeded  $15,000,000,  were  the  follow- 
ing, given  in  order  of  importance:  flour  and  meal,  cotton  goods, 
^fv;;2^^d2L!JT'bf'T^i  i^Oii_jind  its  manufactures,  boots  and  shoes, 
men's  clothing,  leather ^nd  skins,  gDolengoods^iiscellaneous 
macTimery,  sugaTrefining,  provisions,  print  ingand  publishing, 
carriages,  distilled  liquors,  furniture  and  cabinet  wares,  tobacco 
and  snuff,  malt  liquors,  paper,  soap  and  candles,  oil,  agricul- 
tural implements,  bread  and  crackers,  hats  and  caps,  tin,  copper 
and  sheet  iron,  marble  and  stone  work.     A  brief  survey  of  the 


166       ECONOMIC  HISTORY   OF   THE    UNITED  STATES 

foregoing  list  shows  that  many  of  the  most  important  so-called 
manufactures  at  this  time  were  closely  allied  to  the  extractive 
industries;  the  development  of  pure  manufactures  on  a  large 
scale  did  not  occur  until  some  time  after  the  Civil  War.  In 
this  connection  two  industries  are  deserving  of  special  mention, 
as  they  were  peculiarly  characterized  by  the  application  of 
machinery  to  their  methods  of  production,  with  resulting  rev- 
olutionary changes  therein.  These  w^ere  the  men's  ready-made 
clothing  and  the  boot  and  shoe  industries;  their  machine  pro- 
duction was  peculiarly  an  American  development  and  w^as  made 
possible  by  the  invention  of  the  sewing  machine.  In  the  manu- 
facture of  brass  clocks  there  w^as  an  equally  striking  evidence 
of  the  ingenuity  of  American  manufacturers;  the  parts  were 
stamped  out  by  machinery,  and  for  cheapness  and  excellence 
were  without  rivals.  The  distribution  of  miscellaneous  man- 
ufactures w^as  fairly  general  throughout  the  country,  every 
State  being  represented;  New  York,  Pennsylvania,  Massachu- 
setts, and  Ohio  led  in  the  value  of  output. 

"-)  155.  The  tariff,  1842-1846.  —  The  panic  of  1837  had  caused 
y^  a  serious  decline  in  the  government  revenues,  and  to  meet  this 
deficiency  it  was  thought  best  to  raise  the  tariff  duties,  which 
had  been  gradually  lowered,  under  the  tariff  of  1833,  to  a  level 
of  twenty  per  cent.  A  tariff  act  was  therefore  passed  in  1842 
restoring  duties  to  about  the  level  of  the  act  of  1832.  It  was 
decidedly  protective  in  character.  Very  high  rates  were  placed 
upon  those  articles  which  it  was  desired  to  protect,  as  cotton 

^bagging,  wdndow  glass,  cut  nails,  refined  sugar,  and  especially 
/  iron,  upon  which  the  duties  were  as  high  as  77  per  cent.  At 
the  same  time  some  other  administrative  changes  were  made: 
specific  duties  were  laid  where  possible,  while  cash  duties,  home 
valuation,  and  the  examination  of  parties  under  oath  made 
the  act  distasteful  to  importers. 
-p       When  the  Democrats  came  into  power  in  1845,  they  pro- 

/  ceeded  to  reform  the  tariff  along  revenue  lines.  Robert  J. 
Walker  was  appointed  secretary  of  the  treasury  and  drew  up 
a  tariff  act  upon  free-trade  principles.     Articles  were  divided 


THE  GROWTH   OF    THE  FACTORY   SYSTEM  167 

into  several  schedules,  labeled  A,  B,  C,  etc.,  and  the  groups 
were  taxed  respectively  100  per  cent.,  40  per  cent.,  and  so  on 
down  to  5  per  cent.  The  controverted  articles,  for  which  the 
manufacturers  demanded  protection,  like  iron,  manufactures 
of  metals,  wool  and  woolens,  leather,  glass,  paper,  and  wood, 
were  placed  in  class  C  and  taxed  30  per  cent.  While  it  has 
often  been  called  a  free-trade  measure  it  was  really  only  mod- 
erated protection.  On  the  administrative  side  all  the  duties 
were  made  ad  valorem,  w^hich  led  to  considerable  undervalua-^ 
tion  and  evasion.  The  warehousing  system,  under  which  the 
government  stores  the  imported  goods  until  the  duties  are 
paid,  was  introduced  at  this  time,  and  this  feature  has  been 
permanently  retained. 

156.  The  tariff,  1846-1861.  —  The  period  from  1846  to 
1861  was  one  of  great  industrial  prosperity  in  the  United  States. 
As  has  been  pointed  out,  the  gold  discoveries  in  California,  the 
rapid  building  of  railroads  and  opening  up  of  the  West,  the 
increase  in  immigration,  the  famine  in  Ireland,  and  other 
factors  brought  about  a  great  revival  of  business  and  rise  in 
prices.  With  this  expansion  of  activity  importations  increased 
and  with  them  the  government  revenues,  until  it  became 
necessary  to  lower  the  duties  in  order  to  reduce  the  redun- 
dant income.  The  average  annual  yield  of  the  tariff  of  1846 
was  $46,000,000,  while  that  of  1842  had  been  $26,000,000.  In 
1857  a  measure  was  passed  with  little  party  opposition  which 
provided  for  a  reduction  of  about  five  per  cent,  from  the  tariff 
of  1846;  at  the  same  time  the  free  list  was  enlarged. 

Within  a  few  months  after  the  passage  of  this  act  a  severe 
commercial  and  financial  panic  broke  out,  which  greatly  re- 
duced the  government  revenues  and  resulted  in  a  series  of 
treasury  deficits.  Accordingly  the  Morrilj__tprifF  of  ^^f^^  rp- 
stored  duties  to  about  the  level  of  the  tariff  of  1846.  There 
has  been  much  discussion  as  to  the  degree  of  causal  connection 
between  the  tariff  measures  of  1846  and  1857  and  the  early 
prosperity  and  later  depression  of  this  period,  but  it  seems  clear 
that  other  factors  were  much  more  important  in  bringing  about 


168       ECONOMIC  HISTORY   OF    THE    UNITED  STATES 

these  results  than  the  tariff  acts.  There  had  been  an  enor- 
mous addition  to  the  circulating  medium  of  the  country,  in  the 
form  both  of  gold  and  of  bank-notes  and  credit;  railroad  build- 
ing was  excessive,  speculation  in  western  lands  and  doubtful 
industrial  enterprises  was  general,  while  large  importations 
had  created  a  heavy  balance  of  foreign  indebtedness  against 
us.  These  forces  alone  would  undoubtedly  have  brought 
about  a  reaction,  which  at  most  was  only  precipitated  by  tariff 
changes. 

SUGGESTIVE  TOPICS  AND  QUESTIONS.     CHAPTER  XII 

1.  Do  you  regard  the  decrease  in  the  number  of  small  industrial 
establishments  as  a  loss  or  a  gain  to  the  nation? 

2.  Mention  some  of  the  great  fortunes  made  as  a  result  of  patents. 

3.  Is  it  right  or  expedient  to  give  a  man  a  complete  monoply  over  a 
patented  invention  for  seventeen  years?  Are  inventions  ever  patented 
and  then  not  used?  Would  it  be  better  to  throw  open  the  invention  to 
every  one  on  condition  of  paying  a  royalty  to  the  inventor?  [Jenks, 
Trust  Problem,  1st  ed.,  220.] 

4.  Are  most  successful  inventions  made  by  accident  or  after  long 
study?  [Smith,  Wealth  of  Nations,  book  1,  chap.  1  (p.  11  in  Econ.  Classics); 
Senior,  Pol.  Econ.,  73,  74;  Mill,  Princ.  of  Pol.  Econ.,  book  1,  chap.  8,  sect. 
5;  Sargent,  Public  Men  and  Events,  II,  193.] 

5.  How  do  the  people  of  the  Old  World  heat  their  houses?  Are 
American  methods  superior? 

6.  Describe  some  unique  American  inventions  which  are  peculiar, 
so  far  as  you  know,  to  this  country.  [Bryn,  Progress  of  Invention,  chap. 
19;  Coman,  227.] 

7.  What  principles  did  Walker  lay  down  in  his  Treasury  report  for 
1845  to  govern  customs  duties?  [Taussig,  State  Papers,  214-251;  Exec. 
Docs.,  29  Cong.,  1  sess.,  II,  No.  6. 

8.  Do  you  think  the  prosperity  of  this  period  was  due  to  the  Walker 
tariff?  [Bishop,  II,  431;  Rabbeno,  184-199;  Stanwood,  II,  83-93; 
Dewey,  256-259;  Sumner,  Hist,  of  Protection.] 

9.  Why  was  a  new  tariff  act  passed  in  1857?  [Dewey,  262;  Stanwood, 
II,  97-108.] 

10.  Do  you  think  it  would  have  been  advantageous  for  the  United 
States  to  have  adopted  a  free  trade  revenue  tariff  after  the  Walker  tariff? 

11.  What  arguments  in  favor  of  protection  were  advanced  by  Henry 
C.  Carey?  [Carey,  Princ.  of  Soc.  Sci.,  I,  chap.  4,  sects.  1-3,  8,  10,  14,  15, 
19,  20,  26-29.] 


THE  GROWTH  OF   THE  FACTORY  SYSTEM  169 

12.  What  was  the  deficit  in  home-grown  wool  required  l)y  our  nianu- 
facturers,  1840-1860?  From  what  places  was  it  supplied?  [Twelfth 
Census  (1900),  IX,  90.] 

13.  Describe  the  manufacture  of  wooden  and  of  l^rass  clocks  in  the 
United  States.     [Bishop,  II,  97,  396,  427.] 

14.  Why  are  patents  or  public  franchises  granted  to  private  in- 
dividuals by  society? 

SELECTED   REFERENCES.     CHAPTER  XII 

**Bishop:  History  of  American  Manufactures,  II,  452-505. 
■ — ■ —  Eighth  Census  (1860),  vol.  Manufactures,  Intro.,  59-72. 
*Grosvenor:  Does  Protection  Protect?     Chaps.  10,  11,  16,  19-22,  24. 
**Peto:  Resources  and  Prospects  of  America,  93-150. 
**Ral)beno:  American  Commercial  Policy,  184-199. 
**Taussig:  Tariff  History  of  the  United  States,  109-160. 

Ashley:  Modern  Tariff  History,  175-192. 

Bolles:  Industrial  History  of  the  United  States,  chap.  10. 

Coman:  Industrial  History  of  the  United  States,  146-151,  222-228. 

Rhodes:  History  of  the  United  States,  III,  28-59. 

Seaman:  Progress  of  Nations,  II,  565-574. 

Taussig:  The  Tariff,  1830-1860,  in  Quarterly  Journal  of  Economics,  II, 

314-346;   History  of    the   Manufacture  of  Iron,   Ibid.,  XIV, 

143-170. 


CHAPTER   XIII 

THE   WESTWARD   MOVEMENT 

157.  Significance  of  the  westward  movement.  —  From  the 
beginning  of  our  history  the  general  movement  of  the  popuhi- 
tion  has  always  been  westward,  but  the  expression  "  westward 
movement  "  has  a  peculiar  significance  during  this  period,  for 
now  began  on  a  large  scale  the  serious  task  of  occupying  and 
subduing  the  country  west  of  the  Alleghanies.  Other  peoples 
in  their  growth  have  had  to  meet  and  conquer  rival  nations. 
With  the  exception  of  the  Indians,  who  often  obstructed  or 
diverted  but  never  permanently  hindered  the  westward  ex- 
pansion, the  only  serious  obstacles  at  this  time  in  the  Avay  of 
the  Americans  were  the  natural  barriers  and  the  inadequacy 
of  the  existing  means  of  trans^ortatioii.  It  was  -the  quiet, 
resistless,  onward  march,  not  of  an  invading  army,  but  of 
\  peaceful  settlers.  For  three  quarters  of  a  century  this  con- 
tinued, giving  character  to  American  life  and  a  sturdiness  and 
energy  which  were  lent  only  by  contact  with  primitive  condi- 
tions and  large  opportunities.  The  very  nature  of  the  people 
V seems  to  have  been  changed  by  this  great  task  of  subduing  a 
continent,  gaining  at  once  in  initiative  and  vigor. 
■^  Beginning  almost  with  the  Revolution,  and  continuing 
with  renewed  energy  after  the  Embargo  and  the  War  of  1812, 
the  people  of  the  United  States  addressed  themselves  as  a 
nation  to  the  development  of  their  internal  resources.  After 
1808  Ciipital  and  labor  began  to  be  diverted  fiaiiL^cQiWi^^^rce 
and  shipping  and  invested  in  western  lands  and  eastern  manu- 
factures; attention  was  now  directed  to  internal  development 
rather  than  to  foreign  policy.  Since  then  the  great  work  of 
the  American  people  has  been  that  of  iipmiing_ULp  and  exploiting 

170 


THE   WESTWARD   MOVEMENT  171 

their  own  resources,  and  has  been  surpassed  in  importance,  if 
at  all,  only  by  the  struggle  for  the  preservation  of  the  Union. 
This  was  the  beginning  of  an  economic  revolution  and  has  given 
color  to  and  dominated  our  entire  industrial  and  political  his- 
tory from  that  day  almost  to  the  end  of  the  nineteenth  century. 
158.  Early  westward  migration.  —  The  successful  ending 
of  the  French   and   Indian  War.  which  gave  to  England  the 


MiGRATIXG    FROM    CONNECTICUT    TO    OhIO 

Settlers  migrating  from  New  England  or  New  York  to  the  Ohio  valley 
usually  traveled  by  wagon  as  far  as  Pittsburg,  from  which  point  they  floated 
down^he  river  to  their  destination.  For  protection  against  the  Indians 
the  emigrants  usually  went  in  large  companies. 

territory  east  of  the  Mississippi,  and  removed  the  fear  of  French 
aggression,  was  the  signal  for  the  first  westward  movement  of 
the  population.  The  earliest  advance  took  place  into  what 
is  now  Kentucky  and  Tennessee:  the  territory  between  the 
Tennessee  and  Ohio  rivers  had  been  ceded  to  the  English  by 
the  Indians,  by  the  treaty  of  Fort  Stanwix  in  1768  and  other 


172       ECONOMIC  HISTORY   OF   THE    UNITED  STATES 

treaties,  and  lay  invitingly  open  to  settlers  from  Pennsylvania, 
Maryland,  Virginia,  and  North  Carolina  by  way  of  the  Ohio 
River  and  its  tributaries  or  by  the  Cumberland  Gap.  The 
movement  was  a  slow  one,  retarded  by  Indian  resistance  and, 
after  the  Revolution,  by  English  hostility,  both  of  which  had 
to  be  met  and  overcome,  largely  by  the  efforts  of  the  settlers 
themselves.  Politically  these  early  settlements  were  of  great 
importance  in  settling  the  dispute  with  Great  Britain  for 
possession  of  the  western  crown  lands. 

A  steadily  growing  stream  of  soldiers  with  military  scrip, 
debt -burdened  and  over-taxed  farmers  from  the  Atlantic 
seaboard,  and  adventurous  pioneers  combined  to  fill  the  western 
country  with  one  of  the  most  composite  populations  to  be  found 
in  the  United  States.  By  1790  there  were  about  200,000 
persons  in  the  territory  west  of  the  Appalachian  Mountains; 
ten  years  later,  387,183;  and  in  1810,  1,075,398.  The  distress 
which  followed  the  War  of  the  Revolution  and  the  attendant 
economic  chaos  drove  the  people  from  the  seaboard  over  the 
mountains  in  search  of  new  fortunes.  Thus  the  settlement  of 
the  West  began  almost  simultaneously  with  the  birth  of  the 
United  States  as  a  nation;  its  development  was  to  be  the  great 
task  of  the  American  people  for  the  next  century. 

159.  Western  trade.  —  In  the  frontier  of  a  country,  accord- 
ing to  Ratzel,  is  to  be  found  an  index  of  its  growth  or  decay. 
Judged  by  this  standard  the  early  western  settlements  were 
significant  of  great  national  vigor.  Cut  off  as  they  were  from 
easy  communication  with  the  eastern  seaboard,  they  were 
compelled  to  become  largelv  self-supporting  and  economically 
independent.  Of  necessity  the  settlers  were  forced,  by  the 
high  prices  of  imported  goods,  to  manufacture  articles  of  daily 
use.  Almost  every  community  had  a  grist  and  saw  m.ill,  while 
many  ha4  forges,  tanneries,  and  salt  works,  paper  and  cotton 
mills.  A  few  products  like  hides,  furs,  and  ginseng  they  could 
send  east  by  pack  horses  or  wagon,  while  hogs,  cattle,  and 
horses  could  be  driven  over  the  mountains;  but  most  of  their 
produce  found  its  way  down  the  Mississippi. 


V 


THE   WESTWARD  MOVEMENT 


173 


During  the  Revolution  there  was  a  considerable  trade 
between  New  Orleans  and  the  western  settlements  along  the 
Ohio  and  Mississippi  rivers;  but  the  oppressive  commercial 
regulations  of  hSpaJn  between  1785  and  1795  almost  destroyed 
this.  The  agitation  aroused  by  the  closure  of  this  natural 
market  for  western  produce  led  to  Pinckney's  treaty  of  1795, 
which  secured  the  free  and  unlimited  navigation  of  the  Missis- 


CoxESTOGA  Wagon 
This  was  a  favorite  type  of  conveyance  for  transporting  freight  across 
the  Alleghanies  to  the  Ohio  and  Mississippi  valleys  previous  to  the 
introduction  of  the  railways.  Drawn  by  four  to  seven  horses,  they 
could  carry  from  four  to  six  tons,  on  which  the  rates  from  Philadel- 
phia to  Pittsburg  were  about  $2.00  a  hundred  pounds;  the  trip 
between  these  points  was  made  in  twenty  days.  They  were  first 
extensively  used  in  the  Conestoga  valley,  from  which  they  derived 
their  name. 

sippi,  and  ultimately  led  to  the  purchase  of  Louisiana.  Im- 
portant as  this  outlet  was,  the  West  showed  little  economic 
development;  a  growing  population  found  easy  subsistence  on 
a  fertile  soil,  but  they  had  as  yet  little  in  the  way  of  sur- 
plus products  to  sell  and  no  important  market.  By  1807  the 
total  value  of  the  produce  received  at  New  Orleans  was  only 
$5,370,000. 

160.  Movement  of  the  population.  —  There  was  a  rapid 
settlement  of  the  Mississippi  valley  after  the  purchase  of 
Louisiana,  and  between  1810  and  1820  that  movement  received 
a  new  stimidus.  In  1810  about  one  million  people  were  living 
in  the  western  States  and  territories,   a  number  which  more 


174       ECONOMIC  HISTORY   OF    THE    UNITED  STATED 

than  doubled  within  the  next  ten  years.  So  long  as  free  land 
was  to  be  had,  the  rate  of  movement  westward  has  always  been 
a  fluctuating  one,  being  retarded  or  hastened  by  the  economic 
condition  of  the  people;  in  good  times  it  has  been  slow;  in  bad 
times,  rapid.  During  the  period  of  depression  following  the 
Revolution,  the  migration  from  the  Atlantic  seaboard  was 
rapid.  It  declined  during  the  good  times  of  the  Napoleonic 
wars,  with  the  exception  of  a  huge  wave  at  the  time  of  the 
Peace  of  Amiens,  which  sufficed  to  bring  Ohio  into  the  Union. 
The  Embargo  and  the  War  of  1812  again  sent  streams  of  set- 
tlers west  in  search  of  better  conditions.  This  movement  has 
been  well  described  in  Peck's  New  Guide  to  the  West,  published 
in  Boston  in  1837,  in  the  following  passage: 

"Generally,  in  all  the  western  settlements,  three  classes,  like  the 
waves  of  the  ocean,  have  rolled  one  after  the  other.  First  comes  the  pio- 
neer, v/ho  depends  for  the  subsistence  of  his  family  chiefly  upon  the  natural 
growth  of  vegetation,  and  the  proceeds  of  hunting.  His  implements  of 
agriculture  are  rude,  chiefly  of  his  own  make,  and  his  efforts  directed 
mainly  to  a  crop  of  corn  and  a  'truck  patch.'  ...  A  log  cabin,  and 
occasionally  a  stable  and  corn-crib,  and  a  field  of  a  dozen  acres,  the  timl^er 
girdled  or  'deadened,'  and  fenced,  are  enough  for  his  occupancy.  .  .  . 
The  pre-emption  law^  enables  him  to  dispose  of  his  cabin  and  corn-field 
to  the  next  class  of  emigrants;  and,  to  employ  his  own  figures,  he  .  .  . 
'clears  out  for  the  New  Purchase'  ...  to  work  the  same  process  over. 

"The;  next  class  of  emigrants  purchase  the  lands,  add  field  to  field, 
clear  out  the  roads,  throw  rough  bridges  over  the  streams,  put  up  hewn 
log  houses  with  glass  windows  and  brick  or  stove  chimneys,  occasionally 
plant  orchards,  build  mills,  school-houses,  court-houses,  etc.,  and  exhibit 
the  picture  and  forms  of  plain,  frugal,  civilized  life. 

"Another  wave  rolls  on.  The  men  of  capital  and  enterprise  come. 
The  settler  is  ready  to  sell  out  and  take  advantage  of  the  rise  in  property, 
push  further  into  the  interior  and  become  himself  a  man  of  capital  and 
enterprise  in  turn.  The  small  village  rises  to  a  spacious  town  or  city; 
substantial  edifices  of  ])rick,  extensive  fields,  orchards,  gardens,  colleges, 
and  churches  are  seen." 

161.    Results   of   the   movement.  —  The   population   of  the 
northwestern  States  —  Ohio,  Indiana,  Illinois,  Michigan',  Wis- 
consin,  Iowa  —  increased  from  50,240  in   1800  to  792,719  in 
*  See  chap.  18,  sect.  214. 


THE   WESTWARD  MOVEMENT  175 

1820,  and  2,967,840  in  1840.  ''  We  are  great,"  said  Calhoun 
in  1817,  ''  and  rapidly  —  I  was  about  to  say  fearfully  —  grow- 
ing." So  great  indeed  had  this  westward  migration  become 
by  1817  that  its  effects  were  already  apparent  in  the  East,  from 
which  most  of  the  settlers  came.  In  New  York  the  increase 
in  population  between  1810  and  1816  was  only  3600,  which 
was  much  less  than  the  gain  in  the  number  of  immigrants  in 
the  State.  The  West,  on  the  other  hand,  developed  rapidly; 
there  was  no  sudden  growth  of  cities,  however.  The  population 
simply  spread  out  over  a  wider  territory,  which  it  brought  under 
cultivation.  Thus  from  1820  to  1830,  while  the  population 
increased  32.5  per  cent.,  the  settled  area  increased  24.4  per  cent.; 
between  1830  and  1840  the  increase  respectively  was  32.5  per 
cent,  and  27.6  per  cent.  During  this  twenty-year  period, 
therefore,  in  spite  of  the  fact  that  the  population  almost  doubled, 
the  density  of  the  settled  area  increased  by  only  about  two  indi- 
viduals to  the  square  mile.  Great  as  was  this  movement,  the 
real  significance  lay  not  so  much  in  the  increase  in  population 
as  in  the  opening  up  of  the  West.  Before  they  could  make 
any  economic  contribution  to  the  rest  of  the  country,  however, 
the  western  settlers  must  have  access  to  a  market.  There  must 
not  only  be  improvements  in  the  means  of  transportation  and 
communication,  but  there  must  be  a  demand  for  their  products. 
The  first  of  these  conditions,  as  is  pointed  out  by  Callender, 
was  in  large  measure  met  by  the  invention  of  the  steamboat ;  the 
second  by  the  spread  of  cotton  culture  through  the  Southwest. 

162.  The  introduction  of  the  steamboat  on  western  waters. 
—  Within  four  years  after  the  launching  of  the  Clermont 
on  the  Hudson  (1807)  the  first  steamboat  was  introduced  on 
the  Ohio;  but  not  until  1816  did  it  succeed  in  making  the  trip 
up  the  Mississippi  River  from  New  Orleans  against  the  swift 
current.  With  that  event  began  the  era  of  successful  steam 
navigation  on  the  Mississippi  and  its  tributaries.  The  number 
of  steamboats  on  the  western  rivers  increased  rapidly,  from 
14  in  1815  to  200  in  1829,  and  450  in  1842.  An  especial  im- 
petus was  given  to  the  steamboat  trade  in  1824  by  the  decision 


176       ECONOMIC  HISTORY   OF   THE    UNITED  STATES 


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THE   WESTWARD  MOVEMENT 


177 


of  the  Supreme  Court  in  the  celebrated  case  of  Gibbons  vs, 
Ogden,  that  the  waters  of  the  Hudson  were  the  heritage  of 
the  people  and  could  not  be  monopolized  by  any  State  or  in- 
dividual. A  company,  headed  by  Fulton  and  Livingston,  who 
had  made  the  first  experiments  on  the  Ohio  and  Mississippi, 
had  obtained  a  charter  from  Louisiana  giving  them-  the  ex- 
clusive right  of  navigating  the  Mississippi  with  steam  vessels 
for  fourteen  years.  This  monopoly  was  now  broken  down  and 
navigation  made  free  to  all,  subject  only  to  Federal  legislation. 
In  1825  the  steamboat  had  passed  all  competitors  and  in  the 
next  year  carried  fifty-seven  percent,  of  all  the  freight  to  New 
Orleans.     A  considerable  flat-boat  trade  still  existed,  of  which 


Mississippi  River  Flatboat 
Flatboats  were  the  chief  means  of  conveying  goods  to  market  in 
the  West.  They  could  only  be  floated  down  stream,  and  were  built 
of  materials  that  could  be  broken  up  at  the  end  of  the  voyage  and 
sold  as  lumber.  It  took  four  months  to  make  the  journey  from  St. 
Louis  to  New  Orleans  with  such  a  craft. 

a  picture  is  given  by  Levi  Woodbury,  who  made  a  trip  down 
the  Mississippi  in  1833: 

"At  every  village  we  find  from  ten  to  twelve  flat-bottom  boats,  which 
besides  corn  on  the  ear,  pork,  bacon,  flour,  whiskey,  cattle  and  fowls, 
have  a  great  assortment  of  notions  from  Cincinnati  and  elsewhere.  Among 
these  are  corn  brooms,  cabinet  furniture,  cider,  plows,  apples,  cordage, 
etc.  They  remain  in  one  place  until  all  is  sold  out,  if  the  demand  be 
brisk;  if  not,  they  move  farther  down.  After  all  is  sold  out  they  dispose 
of  their  boat,  and  return  with  the  crews  by  the  steamers  to  their 
homes.'' 

13 


178       ECONOMIC  HISTORY   OF    THE    UNITED  STATES 

163.  Extent  of  the  internal  trade.  —  The  steamboat  had 
furnished  the  western  territory  with  a  fairly  rapid  and  adequate 
means  of  transportation,  and  its  effect  upon  the  trade  of  that 
section  was  quickly  seen.  Rates  were  high  at  first :  from  New 
Orleans  to  Louisville  in  1812  freight  rates  were  $112  a  ton  and 
passenger  fares  $125  (half-rates  down  stream),  but  they  were 
materially  reduced  as  soon  as  the  trade  became  established. 
The  improvement  in  speed,  by  reducing  the  time,  increased 
the  number  of  trips.  The  value  of  the  commerce  carried  on 
the  rivers  expanded  greatly.  The  value  of  the  produce  received 
at  New  Orleans  in  1816  was  $8,062,540,  of  which  at  least  eighty 
per  cent,  came  from  the  Ohio  and  upper  Mississippi.  This  in- 
creased by  1829  to  $22,065,518,  and  to  $49,763,825  in  1840. 
The  shipments  were  at  first  raw  agricultural  products,  then 
articles  like  pork,  flour,  and  others  that  required  some  process 
of  treatment,  and  finally  simple  manufactured  articles,  such  as 
bagging,  rope,  twine,  candles,  glass,  and  iron.  They  tell  the 
story  as  well  of  the  industrial  advance  in  the  Ohio  valley  as  of 
the  growing  commerce  between  the  sections.  By  1842  the 
money  value  of  the  direct  river  trade  to  New  Orleans  was 
given  as  $50,506,903.  Including  the  intermediate  trade  and 
the  passenger  traffic,  the  total  commerce  of  the  western  rivers 
was  probably  over  $100,000,000. 

At  the  same  time  the  trade  on  the  Great  Lakes  was  steadily 
growing,  though  not  so  rapidly  as  the  river  commerce.  In 
1816  the  first  steamer  was  built  on  the  waters  of  Lake  Ontario, 
and  two  years  later  the  first  steamer  on  Lake  Erie,  the  Walk- 
in-the-Water,  was  launched.  The  building  of  the  Erie  Canal 
greatly  stimulated  the  lake  trade,  the  tonnage  on  all  the  lakes 
increasing  from  3500  in  1820  to  20,000  in  1830,  and  75,000 
in  1840. 

>  164.  Spread  of  cotton  culture  into  the  Southwest.  —  The 
second  condition  to  the  development  of  the  West  lay  in  the 
creation  of  a  market.  This  condition  was  met  by  the  extension 
of  cotton  culture  into  the  Southwest,  which  at  once  led  to  the 
settlement  of  that  section  and  developed  a  market   for  the 


THE   WESTWARD  MOVEMENT  179 

surplus  agricultural  j^mduc.e  of  the  North.  At  the  time  of 
Whitney's  invention  cotton  was  raised  only  in  Georgia  and 
South  Carolina;  thence  it  spread  to  North  Carolina  and  Virginia 
during  the  early  years  of  this  century,  but  for  more  than  twenty 
years  it  was  confined  to  the  Atlantic  seaboard.  By  1811  a 
beginning  had  been  made  in  Tennessee  and  Louisiana,  but 
together  they  produced  only  one  sixteenth  of  the  cotton  raised 
in  ihxi  United  States.  After  the  war  with  England,  Alabama 
and  Mississippi  also  began  to  attract  attention  as  cotton-grow- 
ing regions  and  for  the  next  twenty-five  years  a  perfect  stream 
of  emigrants  poured  into  this  fertile  district.  By  1821  these 
four  States  raised  one  third  of  the  cotton  grown  in  the  United 
States,  by  1831  nearly  one  half,  and  by  1834  over  two  thirds. 
The  production  of  sugar  was  also  increasing  in  Louisiana  at 
this  time,  and  was  very  profitable.  The  growing  importance 
of  this  section  may  be  shown  by  the  exports  of  cotton  from 
Louisiana,  which  increased  from  five  million  pounds  in  1810 
to  thirty  in  1820  and  one  hundred  and  sixty-four  in  1834.  At 
the  same  time  the  population  of  the  South  was  growing  by  leaps 
and  bounds:  Alabama,  Louisiana,  and  Mississippi  increased 
from  116,908  in  1810  to  355,756  in  1820,  660,677  in  1830,  and 
1,318,818  in  1840,  practically  doubling  every  ten  years. 

165.  Effect  on  the  South.  —  The  effect  of  this  extension  of 
cotton  culture  into  the  Southwest  was  first  of  all  to  increase 
enormously  the  production  of  cotton.  From  85  million  pounds 
in  1810  the  annual  production  grew  to  160  in  1820,  and  460 
in  1834.  Owing  to  a  steady  fall  in  the  price  of  cotton  the 
total  value  of  the  crop  does  not  show  the  same  increase,  the 
figures  for  the  same  years  being  $12,500,000,  $29,500,000,  and 
$76,000,000;  over  three  fourths  of  this  was  exported.  With 
such  a  profitable  crop,  all  the  energies  of  the  southern  planters 
were  devoted  to  extending  the  cotton  area,  other  crops  being 
completely  neglected.  At  the  same  time  slavery  was  firmly 
established  on  an  economic  foundation,  and  so  far  as  the  South 
was  concerned  the  whole  gain  of  the  extension  of  cotton  culture 
went   to  build  up   and   extend  the  system  of  slavery.     The 


180       ECONOMIC  HISTORY  OF   THE    UNITED  STATES 

'circle  of  investment,  as  described  by  a  southern  journal,  was 
'^  making  more  cotton  to  buy  more  negroes  to  raise  more  cotton 
to  buy  more  negroes."  Most  of  the  settlers  in  the  Southwest 
were  slave-holders  who  came  from  the  older  slave  States  with 
their  property;  two  hundred  and  fifty  thousand  slaves  are 
reported  to  have  been  brought  into  this  region  during  the 
single  year  1836. 

By  the  ordinance  of  1787  and  subsequent  acts  of  Congress 
slavery  had  been  forbidden  north  of  the  Ohio  River  and  east  of 
the  Mississippi,  but  as  yet  the  question  of  slavery  west  of  that 
great  river  had  not  been  settled.  In  1812  the  slave  State  of 
Louisiana  was  admitted  to  the  Union,  and  in  1818  Missouri 
applied  for  admission,  followed  a  year  later  by  Maine.  The 
question  as  to  whether  Missouri  should  be  admitted  as  a  free 
or  a  slave  State  was  hotly  debated.  Finally,  in  1820,  by  the 
so-called  IMissouri  Compromise,  Missouri  was  admitted  as  a 
slave  State,  while,  to  balance  the  concession  to  the  slave-owners,. 
Maine  was  admitted  as  a  free  state  and  slavery  was  forbidden 
in  the  remainder  of  the  Louisiana  purchase  north  of  Arkansas. 
Thus  the  cotton-growing  States  of  the  Southwest  Avere  opened 
to  slavery  until  the  time  of  its  final  abolition. 

166.  Slavery  is  firmly  established.  —  The  development  of 
slavery  proceeded  with  the  spread  of  cotton  culture  and  be- 
came firmly  identified  with  it.  By  1822  the  large  plantation 
slave  system  was  taking  the  lead,  and  by  1840  it  had  displaced 
the  sm^all  planter  who  was  working  with  free  labor.  The  char- 
acter of  slavery  had  meantime  changed  from  the  patriarchal 
serfdom  of  colonial  days  to  a  well-organized  industrial  system 
upon  which  was  founded  the  economic  development  of  the 
South.  At  the  same  time  the  attitude  of  the  South  towards 
the  institution  changed  with  the  expansion  of  the  cotton 
industry.  From  1808  to  1820  many  Southerners  were  willing 
to  abolish  the  slave  systern,  could  it  be  done  safely  and  with- 
out loss.  From  1820  on,  however,  there  was  no  talk  of  aboli- 
tion; the  demand  for  cotton  and  the  movement  into  the  rich 
bottom  lands  of  Mississippi  led  to  a  demand  for  labor  which 


THE   WESTWARD  MOVEMENT  181 

could  not  be  supplied  even  by  the  traffic  which  began  between 
the  slave-breeding  border  States  and  the  cotton-growing  Gulf 
States.  An  illicit  slave-trade  accordingly  sprang  up  between 
Africa  and  the  West  Indies  or  Texas,  whence  slaves  were 
smuggled  into  the  southern  States.  The  increased  prices  of 
slaves,  owing  to  the  risk  attaching  to  the  business  and  to 
the  demand  in  the  cottonfields,  proved  an  irresistible  attrac- 
tion to  American  capital,  and  much  was  invested  in  the  trade. 
In  1815  the  average  value  of  all  slaves  dependent  on  cotton 
culture  was  $250;  in  1840  it  was  estimated  by  De  Bow  at 
$500.  Slavery  had  now  become  more  than  ever  localized  in 
the  South.  In  1820,  only  19,108  of  the  1,538,038  slaves  in 
the  United  States  lived  north  of  Mason  and  Dixon's  line;  in 
1840,  only  1129  out  of  2,487,355  were  to  be  found  there. 
The  total  number  of  slaves  showed  an  increase  in  almost  the 
same  proportion  as  the  white  population,  and  this  in  spite  of 
the  large  additions  to  the  latter  by  immigration. 

Toward  the  end  of  this  period,  in  1831,  the  anti-slavery 
movement  began  in  the  North,  and  continued  until  slavery  was 
done  ^way  with  during  the  Civil  War.  There  was,  however, 
a  strong  anti-abolition  spirit  still  to  be  found  there,  while 
Congress  remained  distinctly  neutral  or  even  friendly  to  the 
slave  interests,  as  indicated  by  the  '^  gag  resolutions  "  which 
tabled  without  further  action  all  anti-slavery  petitions  pre- 
sented to  Congress.  About  1838  a  change  in  sentiment  toward 
slavery  began  in  the  North,  but  it  did  not  gather  strength 
until  after  1840. 

167.  Effect  on  the  West.  —  We  have  already  seen  some- 
thing of  the  great  increase  in  commerce  on  the  western  rivers 
after  1816.  It  was  the  opening  up  of  the  Southwest,  with  its 
one-sided  single-crop  cultivation,  that  provided  an  outlet  for 
the  surplus  agricultural  produce  of  the  North  and  thus  per- 
mitted the  development  of  this  section  as  well.  So  great  was 
the  inclination  of  the  cotton  planters  to  confine  themselves  to 
their  staple  crop,  that  other  products  were  entirely  neglected, 
and  instead  of  being  raised  at  home  were  purchased  from  the 


182       ECONOMIC  HISTORY   OF    THE    UNITED   STATES 

agricultural  States  of  the  Northwest  with  the  proceeds  of  the 
cotton  crop.  Corn,  flour,  bacon,  hams,  lard,  and  live  stock, 
with  a  hundred  other  articles  of  minor  importance,  were  floated 


Western  Ark 
The  "ark"  was  little  better  than  a  raft  with  a  deck  house  and  was 
built  of  rough  planks  which  could  be  used  for  building  when  the 
journey  was  over.  It  was  used  for  the  transportation  down  stream 
of  stores  and  freight,  and  was  some  forty  feet  long  by  fifteen  feet 
wide.  Travelers  at  first  used  the  speedier  and  more  comfortable 
keel  boats  for  their  own  conveyance,  and  later  the  steamers. 

down  the  Ohio  and  Mississippi  rivers  and  found  a  ready  market 
in  the  southern  States.  The  following  table  shows  the  increase 
in  the  amount  of  a  few  products  arriving  in  New  Orleans: 

Receipts  of  Produce  at  New  Orleans 


Articles 

1822 

1830 

1840 

ria.pon     71011  nHts 

1,282,354 
42,194 
290,754 
360,580 
131,111 
953,200 

1,117,987 
152,965 
278,358 
482,523 
177  303 

Corn  in  ear,  barrels 

Corn,  shelled,  sacks 

Flour,  barrels 

57,179 

120,159 

13,003 

142,800 

Lard    kegs 

Pork,  pounds 

5.099,987 

THE   WESTWARD  MOVEMENT  183 

An  estimate  of  1845,  given  by  Ingle,  was  that  in  twenty 
years  soutliern  planters  had  spent  $900,000,000  in  neighboring 
States  for  mules,  horses,  implements,  and  clothing,  an  expen- 
diture made  necessary  because  they  had  employed  all  their 
labor  and  land  in  producing  staple  crops. 

168.  Effect  upon  the  East.  —  The  effects  of  the  extension 
of  cotton  culture  and  the  consequent  creation  of  an  important 
new  market  was  felt  in  the  East  as  well  as  in  the  Northwest. 
The  growing  manufactures  of  this  section  found  a  ready  sale 
amon^  the  population  west  of  the  Alleghanies.  There  had  ' 
thus  developed  a  sectional  or  territorial  division  of  labor,  by 
which  the  South  produced  raw  materials  (mainly  for  export), 
the  Northwest  raised  the  food  supplies,  and  the  East  devoted 
itself  to  manufactures.  The  trade  in  each  case,  however,  was 
a  one-sided  one  and  did  not  lead  to  close  economic  interde- 
pendence; the  East  sold  to  the  West,  but  did  not  buy  from 
it,  the  West  sold  to  the  South,  and  the  South  exported  three 
fourths  of  its  crop  to  England.  Some  indication  has  already 
been  given  of  the  large  and  remunerative  internal  trade  which 
resulted  from  the  exchange  of  these  goods.  An  enormous 
stimulus  was  given  to  the  commercial  interests  of  the  country, 
and  new  opportunities  were  opened  to  the  merchant,  importer, 
ship-owner,  banker,  insurance  company,  and  middlemen  in 
general,  most  of  whom,  were  located  in  the  eastern  States. 
The  growth  of  manufactures  has  been  described,  but  it  is 
impossible  to  give  any  adequate  picture  of  the  development  of 
the  commercial  class  at  this  period.  According  to  an  estimate 
by  Seaman,  in  1840  there  were  188,000  persons  engaged  in 
commerce  and  navigation  employing  a  capital  of  $430,000,000. 

While  the  rapid  growth  in  the  population  during  this  period 
was  largely  due  to  the  natural  increase  of  births  over  deaths, 
considerable  additions  were  being  made  by  immigration.  The 
total  population  of  the  United  States  grew  from  7.000.000  in 
1810  to  17,000,000  in  1840.  Of  this  increase  it  has  been 
estimated  that  114,000  were  immigrants  during  the  decade 
1810-20.     From    1820,    when    statistics    of    immigration    first 


184       ECONOMIC  HISTORY   OF   THE    UNITED  STATES 

began  to  be  gathered,  until  1840,  the  number  of  aliens  was 
750,949.  During  the  twenties  immigration  was  small,  but 
beginning  with  1832  it  increased  rapidly,  and  by  1840  had 
reached  84,066  for  the  year.  The  following  table  shows  the 
growth  in  the  population,  and  the  proportion  between  white 
and  colored,  from  1790  to  1840: 


The  Population  of 

THE  United 

States,   1790-1840 

Immigration  ^  I"!  > 

Year 

White 

Colored 

Total        i'*"™«'^^'=-il.=l^ 
ade  endmg  jg^g^ 

i||l| 

with  year 

1790 

3,172,006 

757,208 

3,929,214 

) 

3.35 



1800 

4,306,446 

1,002,037 

5,308,483 

1     about 

3.97 

35.1 

1810 

5,862,083 

1,377,808 

7,239,891 

1     200,000 

4.93 

36.4 

1820 

7,862,166 

1,771,656 

9,633,822 

1 
J 

4.93 

33.1 

1830 

10,537,378 

2,328,642 

12,866,020 

143,439 

6.72 

33.5 

1840 

14,195,805 

2,873,648 

17,059,453 

599,125        8.52 

32.7 

SUGGESTIVE  TOPICS  AND  QUESTIONS.     CHAPTER  XIII 

1.  Is  Bishop  Berkeley's  saying,  "Westward  the  course  of  empire  takes 
its  way,"  true  of  the  United  States? 

2.  "The  true  point  of  view  in  the  history  of  this  nation  is  not  the 
Atlantic  coast,  it  is  the  great  West.  Even  the  slavery  struggle  .  .  .  occupies 
its  important  place  in  American  history  because  of  its  relation  to  west- 
ward expansion."  Do  you  agree  with  this?  [F.  J.  Turner,  The  Frontier 
in  Amer.  Hist.,  in  Proc.  Amer.  Hist.  Ass.,  Ill,  200.] 

3.  Did  Fulton  first  invent  the  steamboat?  Is  he  entitled  to  the 
credit  of  it?  [Bishop,  I,  75;  Abbot,  chaps.  2,  8;  Johnson,  Great  Events, 
XV,  159-169.] 

4.  Where  were  the  important  western  settlements?  Why  were  these 
particular  localities  chosen?     [Hart,  Hist,  told  by  Contemp.,  Ill,  97-106.] 

5.  How  did  a  western  emigrant  move  in  the  days  before  the  railways? 
[Hart,  Hist,  told  by  Contemp.,  Ill,  114-119.] 

6.  What  was  the  character  of  the  river  craft,  and  of  navigation  on 
western  rivers?  [Hulbert,  Waterways  of  Western  Expansion,  chaps.  3-6; 
Internal  Commerce  of  U.  S.,  Treas.  Dept.,  1887,  178-213;  Abbot, 
268-9.] 

7.  What  attempts  have  been  made  to  restrict  the  navigation  of  the 


THE   WESTWARD  MOVEMENT  185 

Mississippi  River  other  than  that  mentioned  in   the  text?     [Lawrence 
International  Law,  p.  188;  Schuyler,  Amer.  Dipl.  and  Com.,  chap.  6.] 

8.  What  was'  Mason  &  Dixon's  line?  How  did  it  come  to  be  estab- 
hshed?  [Channing,  Stud.  Hist,  of  U.  S.,  115-6;  Elson,  Hist,  of  U.  S.,  153; 
Hart,  Essentials,  109.] 

9.  Describe  the  abolition  and  anti-abohtion  sentiment  in  the  North, 
1830-40.     [Channing,  Stud.  Hist.,  423-427.] 

10.  As  the  population  of  the  cotton  States  grew,  what  proportion  was 
white,  what  slave,  and  what  free  colored?  [Seaman,  Progress  of  Nations, 
I,  584;  Coman,  216;  Fifth,  Sixth  and  Seventh  Census;  Eighth  Census  (1860). 
vol.  on  Pop.,  7-16.] 

11.  Could  the  South  have  diversified  its  crops,  and  produced  its  own 
food  products,  manufactured  goods,  etc.?  Why  did  it  not  do  so?  [Ingle, 
chap.  3;  De  Bow,  Ind.  Resources  of  So.  and  West,  arts.  Agric,  Cotton. 
Slavery,  South,  etc.]. 

12.  What  were  the  exports  of  cotton  during  this  period?  Was  there 
any  connection  between  them  and  the  total  imports,  and  the  countries 
involved?     [Woodbury,  Writings,  III,  272.] 

13.  How  much  of  the  cotton  raised  was  consumed  at. home?  How 
much  in  the  South?     [Woodbury,  ^^ 'ritings,  III,  289-311.] 

SELECTED    REFERENCES.     CHAPTER  XIII 

*Hart:  History  told  by  Contemporaries,  III,  chap.  21. 

**McMaster:  History  of  the  People  of  the  United  States,  III,  459-496; 

IV,  381-428;  5:  166. 
*Rooseveh:  Winning  of  the  West,  I,  chap.  5;  II,  385-390;  IV,  chap.  5. 
**Turner:  The    Frontier   in   American   History,    in   American   Historical 

Association  Reports  (1893),  III,  197-227. 
**Turner:  The  Rise  of  the  New  West. 
*Winterbotham :  View  of  the  American  United  States,  III,  159-191, 229-237^ 

Carr:  Missouri,  chaps.  5-9. 

Coman:  Industrial  History  of  the  United  States,  120-123,  154-162. 

Eighty  Years'  Progress,  165-190. 

Martineau:  Society  in  America,  I,  338-345. 
Schouler:  History  of  the  United  States,  II,  242-251. 
Seybert:  Statistical  Annals,  chap.  12. 


CHAPTER   XIV 
TRANSPORTATION  AND  INTERNAL  IMPROVEMENTS     (1808-1840) 

169. .  Iniportance  of  transportation  in  the  United  States.  — 

At  every  period  of  our  history  the  need  of  improved  means  of 
transportation  has  been  pressing.  This  has  from  the  first 
settlements  been  the  essential  condition  of  the  opening  up  of 
the  continent.  As  the  population  began  to  push  westward 
across  the  mountains  and  away  from  easy  water  communi- 
cation, the  need  became  greater.  The  political  necessity  of 
interstate  communication  was  emphasized  by  the  Revolu- 
tion and  the  separatist  tendencies  of  the  rapidly  growing 
western  territory,  and  with  the  establishment  of  the  Union  a 
movement  for  improvement  was  inaugurated.  At  no  time 
was  the  demand  for  betterment  so  urgent  as  it  was  during  the 
period  which  succeeded  the  War  of  1812.  The  difficulties  of 
transporting  troops  revealed  the  inefficiency  of  existing  means 
of  transportation,  and  the  settlement  of  the  West  which  fol- 
lowed made  improvement  absolutely  imperative.  Only  by 
this  means  could  the  vast  interior  of  the  continent  be  made 
accessible  to  the  people  of  the  United  States  and  be  connected, 
economically  as  well  as  politically,  with  the  Atlantic  seaboard. 
The  westward  movement  of  the  population  and  the  develop- 
ment of  our  resources  were  made  possible  only  by  the  building 
of  means  of  communication  better  than  the  old  trails  or  natural 
waterways. 

170.  Stages  of  development.  —  The_tiuuapike,  the  canal,  the 
steamboat,  and  the^rajlroad  all  mark  successive  stages  in  the 
improvements  which  were  effected.  The  opening  of  the  South- 
west, the  development  of  commerce  between  that  section  and 
the  North  and  East,  and  the  growth  of  population  throughout 

186 


TRANSPORTATION  AND   INTERNAL  IMPROVEMENTS        187 

the  entire  western  territory,  at  once  occasioned,  and  were  made 
possible  by,  the  improvement  of  the  means  of  communication 
and  trade.  The  demand  for  better  facilities  led  to  the  invest- 
ment on  the  part  of  the  people,  not  only  in  the  western  country, 
but  in  the  East  as  well,  of  immense  sums  of  capital  in  these 
enterprises,  and  resulted  in  an  unexpected  but  revolutionary 
change  in  the  economic  policy  of  the  country. 

The  history  of  transportation  in  the  United  States  divides* 
itself  logically  into  three  periods:  the  turnpike  period,  the  river 
and  canal  period,  and  the  railway  period.  Of  these  the  first  be- 
longs to  the  time  between  the  Revolution  and  the  War  of  1812. 
Before  this  movement  had  more  than  fairly  gained  headway, 
canals  began  to  be  built,  and  for  some  time  also  the  use  of 
the  steamboat  greatly  stimulated  river  navigation. -  This  period 
may  be  said  to  have  continued  fromiJ816  to  1840.)  About  the 
latter  date  railroad  building,  which  had  begun  ten  years  before, 
set  in  on  a  considerable  scale  and  railroads  began  to  threaten 
the  supremacy  of  the  canals;  by  1850  they  had  almost  super- 
seded the  latter. 

171.  The  turnpike  period.  —  The  first  American  turnpike 
was  built  in  1790,  and  soon  NewYork,  Pennsylvania,  and 
New  England  were  fairly  well  supplied  with  them.  They  were 
a  great  improvement  over  the  early  local  roads,  for  they  were 
built  as  a  continuous  line  for  through  traffic;  and  in  spite  of 
high  tolls  greatly  reduced  the  cost  of  transportation.  But,  as 
compared  with  water  carriage,  land  transportation  was  still 
very  expensive.  It  cost  about  thirty-three  per  cent,  of  the 
value  of  goods  to  convey  them  from  PhilaHeTpliia  to  Kentucky 
by  land,  and  only  four  to  four  and  one  half  per  cent,  from  Illinois 
to  New  Orleans  by  water.  On  the  average  it  cost  about  $10 
a  ton  for  every  100  miles  to  transport  goods  by  land;  articles 
which  could  not  stand  these  rates,  as  flour  and  grain,  were 
excluded  from  a  market  unless  they  found  an  outlet  by  water. 
During  the  continental  wars  the  great  demand  abroad  for  our 
agricultural  staples  increased  the  need  at  home  for  better  means 
of  communication.     "  In  a  few  vears  a  sum  almost  equal  to 


188       ECONOMIC  HISTORY   OF   THE    UNITED   STATES 

the  domestic  debt  at  the  close  of  the  Revolution  was  invested 
by  the  people  in  the  stock  of  turnpike  companies." 

Until  1807  the  roads  and  turnpike?  in  the  country  had  been 
constructed  for  the  most  part  by  private  companies,  though 
often  with  vState  aid.  Those  to  the  West  had  been  built  by  the 
shortest  routes  through  the  gaps  in  the  mountains,  starting 
mainly  from  Philadelphia;  Pittsburg  was  an  important  point 
of  trans-shipment  and  was  growing  rapidly.  "  You  may  go 
from  Philadelphia  to  Pittsburgh,"  wrote  Seybert,  "  in  the 
stage,  310  miles,  in  five  and  a  half  days,  and  be  lodged  every 
night  on  the  route." 

172.  Federal  aid.  —  In  the  year  1807  Gallatin  made  his 
famous  report  on  Roads,  Canals,  Harbors,  and  Rivers;  he  pro-' 
posed  a  comprehensive  scheme  of  internal  improvements  by 
Congress,  which  would  involve  an  expenditure  of  about  $20,- 
000,000.  The  net  result  of  the  ensuing  agitation  was  the 
construction  Idv  the  Federal  government  of  the  Cumberland 
Road  or  the  '^  National  Pike  "  from  Washington  to  Vandalia, 
111.  This  was  completed  in  1838  at  an  expense  of  $4,300,000. 
Congress  readily  entered  upon  this  policy  of  internal  improve- 
ments, not  merely  for  the  economic  purpose  of  securing  better 
and  cheaper  transportation,  but  for  political  reasons  also;  a 
minor  consideration  was  the  greater  speed  and  safety  that 
would  be  given  to  the  mails.  As  a  solution  of  the  problem  of 
improved  transportation,  however,  the  building  of  roads  was 
inadequate,  and  before  the  Federal  government  could  enter 
upon  a  more  general  scheme  of  internal  improvements,  doubts 
as  to  its  constitutionality  brought  the  Federal  system  to  an  end. 
But  the  movement  did  not  cease;  better  means  of  communica- 
tion must  be  had,  and  the  work  of  providing  them  was  next 
taken  up  by  the  States. 

173.  The  river  trade.  —  The  invention  of  the  steamboat  in 
1807,  and  its  introduction  upon  the  Ohio  four  years  later, 
made  the  rivers,  as  we  have  seen,  important  highways  of  com- 
merce. Even  in  the  days  of  flat-boats  and  barges  the  trade 
of  the  Mississippi  and  its  tributaries   had  been  considerable, 


TRANSPORTATION  AND  INTERNAL  IMPROVEMENTS        189 

and  it  now  grew  rapidly.  Towns  like  Pittsburg,  Cincinnati, 
St.  Louis,  and  above  all  New  Orleans,  increased  steadily  in 
population.  For  the  agricultural  products  of  the  West  the 
only  outlet  was  New  Orleans;  but  in  the  early  days  the  long 
river  journey  with  no  hope  of  a  return  cargo,  the  danger  to  the 
cargo  by  reason  of  the  change  to  the  hotter  climate  of  the 
xower  Mississippi,  and  finally  the  long  sea  voyage  to  a  market, 
made  the  shipment  of  produce  down  the  river  a  hazardous  and 
often  losing  venture.  The  spread  of  cotton  culture  and  the 
peopling  of  the  Southwest,  by  providing  a  home  market  at  the 
mouth  of  the  Mississippi,  greatly  increased  the  river  trade  and 
^0  some  extent  solved  the  problem  of  an  outlet  for  the  produce 
f  the  western  country. 

But  the  farmers  in  northern  Ohio  and  Indiana,  in  Michigan, 
and  other  sections  of  the  country  that  were  not  situated  on  a 
tributary  of  the  Mississippi,  still  clamored  insistently  for  better 
means  of  communication,  especially  with  the  East.  In  addi- 
tion to  the  economic  weakness,  there  was  also  a  political  danger 
in  the  situation.  The  country  was  divided  into  three  strongl}^- 
marked  sections  —  the  East,  the  South,  and  the  West  —  and 
the  economic  bonds  holding  them  together,  especially  those 
between  the  East  and  West,  were  not  sufficiently  powerful  to 
overcome  the  tendencies  toward  separation  which  had  even 
now  shown  themselves. 

174.  Early  canals.  —  While  canal  building  on  a  large  scale 
did  not  take  place  until  after  the  turnpike  period  had  prac- 
tically ended,  a  beginning  was  made  as  early  as  ITS^^-Jf^hen 
Virginia  granted  a  charter  to  the  James  River  Company.  Their 
importance,  however,  had  early  been  recognized  by  George 
Washington,  and  even  before  the  Revolution  he  had  planned  a 
canal  to  connect  the  Chesapeake  and  Ohio  rivers  and  had 
prophesied  the  union  of  the  Hudson  River  with'  Lake  Erie. 
He  recognized  that  a  country  of  such  vast  extent  could  be  held 
together  only  by  closer  economic  bonds.  The  first  canal  con- 
structed in  the  United  States  was  the  Dismal  Swamp  Canal./ 
begun  in  1787  under  a  joint  charter  from  Virginia  and  North 


190       ECONOMIC   HISTORY   OF    THE    UNITED   STATES 

Carolina,  and  opened  in  1794.  Many  other  canals  were  pro- 
jected between  1790  and  1800,  especially  in  New  York,  Penn- 
sylvania, and  Massachusetts,  but  the  era  of  canal  building  did 
not  really  occur  until  after  the  War  of  1812. 

175.  The  era  of  canal  building :  The  Erie  Canal.  —  The  first 
answer  on  a  large  scale  to  the  demand  for  improved  means  of 
communication  was  made  by  New  York  State  in  building  the 
Erie   Canal,   connectino;   Lake   Erie   with   the   Hudson   River. 


Erie  Canal 
The  Erie  Canal  was  the  most  important  artificial  waterway  built  in  the  United 
States.     By  connecting  the  Hudson  River  with  the  Great  Lakes  it  formed  a 
continuous  waterway  from  the  middle  west  to  the  Atlantic  seaboard,  and  had 
a  wonderful  influence  in  opening  up  the  new  sections  of  the  country. 


Gallatin  names  six  canals  that  had  been  constructed  prior  to 
1807  at  a  cost  of  over  ten  million  dollars;  but  none  of  any 
commercial  importance  had  been  attempted  until  the  success 
of  the  Erie  Canal  showed  the  way.  The  plan  for  this  was  not 
a  new  one;  as  early  as  1792  a  company  had  been  formed  to 
connect  Lake  Erie  with  the  Hiidson  River.  The  actual  work 
of  building  the  canal  did  not  begin  until  1817,  but  within  eight 


TRANSPORTATION   AND   INTERNAL   IMPROVEMENTS        191 

years  it  was  finished.  The  completion  of  the  ''  big  ditch  " 
was  celebrated  with  appropriate  ceremonies  at  Buffalo,  from 
which  point  a  fleet  of  boats  proceeded  to  New  York,  where 
their  arrival  was  the  signal  for  a  fresh  outburst  of  enthusiasm. 
A  flask  of  water  from  Lake  Erie  was  poured  into  New  York 
Bay  and  the  marriage  of  the  inland  waters  with  those  of  the 
ocean  w^as  declared  to  be  consummated.  The  canal  immediately 
became  a  source  of  revenue,  entirely  paying  for  itself  in  ten 
years  and  returning  ample  profits  to  the  stockholders. 

Still  more  important  than  the  financial  returns  were  the 
economic  advantages  of  the  canal  to  the  community  at  large. 
Wherever  the  canal  touched  a  waterway  a  thriving  town 
sprang   up,   as   at    Syracuse,   Rochester,    and   Utica.     Buffalo 


Caxal  Passenger  Packet  Boat 
Canal  boats  were  at  first  used  not  merely  for  freight,  but  also  for 
passengers.     This  packet  boat  represents  one  of  the  type  used  on 
the  Pennsylvania  canal  about  1835. 

and  Albany,  the  terminals,  grew  rapidly  and  New  York  City 
became  the  leading  port  of  the  United  States.  Branch  canals 
were  built  connecting  the  main  canal  with  Champlain,  Ontario, 
and  Seneca  Lakes,  and  these  stimulated  a  vigorous  trade. 
The  number  of  vessels  on  Lake  Champlain  before  the  canal  was 
opened  was  only  20,  but  a  year  later  there  were  218.  Previous 
to  the  construction  of  the  canal  the  cost  of  transportation  from 
Buffalo  to  New  York  City  was  $100  a  ton  and  the  ordinary 
length  of  passage  twenty  days;  most  of  the  wheat  of  western 
New  York  was  accordingly  floated  down  the  Susquehanna  to 
Baltimore.  On  the  opening  of  the  Erie  Canal  the  cost  of  freight 
fell,  according  to  its  class,  to  between  S15  and  $25  a  ton,  and  the 
time  of  transit  was  reduced  to  eight  days.     Rates  from  Ohio 


192       ECONOMIC  HISTORY  OF   THE   UNITED  STATES 

to  the  seaboard  were  steadily  lowered  until  they  were  only 
about  one  tenth  the  former  figures.  Nor  were  the  effects 
confined  to  New  York  State  alone;  the  entire  western  lake 
district  had  secured  an  outlet  for  its  produce,  and  much  that 
previously  went  down  the  Mississippi  to  New  Orleans  was  now 
shipped  through  Buffalo  at  greatly  reduced  rates.  The  build- 
ing of  the  Erie  Canal  had  established  an  economic  bond  be- 
tween the  East  and  the  West. 

176.  Canals  in  other  States.  —  The  success  of  this  under- 
taking led  to  a  perfect  mania  for  canal  building  and  public 
improvements,   which  was   greatest   in   Pennsylvania,   Massa- 


Passenger  Packet  and  Freight  Boats,  Erie  Canal 
On  the  slow,  but  easily  moving  canal  packet  l^oat,  travel  was  decidely 
more  comfortable  than  in  the  jolting  stage-coach.  Seated  on  the 
cabin  roof  the  passengers  exchanged  views  on  the  scenery  or  the  topics 
of  the  day  until  the  cry  of  ''  low  bridge  "  drove  them  down.  Berths 
were  arranged  along  the  sides  within  and  partitioned  off  by  curtains. 
An  ordinary  freight  boat  is  also  shown. 


chusetts,  Maryland,  Virginia,  Ohio,  Indiana,  and  Michigan. 
Philadelphia,  Boston,  and  Baltimore  saw  their  trade  threat- 
ened by  the  diversion  of  the  western  commerce  to  New  York 
City,  and  accordingly  the  States  in  which  these  cities  were 
situated  began  to  plan  works  to  compete  with  the  Erie  Canal. 
The  State  of  Pennsylvania  constructed  a  system  of  canals 
from  Philadelphia  to  Pittsburg,  with  a  portage  railway  over 
the  Alleghanies,  at  a  cost  of  over  $10,000,000.  It  was  com- 
pleted in  1834,  and  was  successful  from  the  beginning.  Massa- 
chusetts appointed  a  commission  to  inquire  into  the  possibility 


TRANSPORTATION  AND  INTERNAL  IMPROVEMENTS        193 

of  cutting  a  canal  from  Boston  to  the  Hudson  River,  in  order 
to  divert  some  of  the  increasing  western  trade.  By  the  time 
Baltimore  was  ready  to  act  railroads  had  attracted  favorable 
attention  as  an  improved  means  of  transportation,  and  in 
Maryland  the  first  railroad  was  built  in  1828. 

It  was  in  the  western  States,  however,  with  their  long  dis- 
tances and  complete  lack  of  roads,  that  canals  were  of  the 
greatest  economic  significance.  The  opening  of  the  Erie 
Canal  was  the  signal  for  similar  improvements  in  several  of  these 
States.  The  most  important  projects  were  those  to  connect 
the  lakes  with  the  Ohio  and  Mississippi  rivers.  By  1832  the 
Ohio  Canal,  from  Cleveland  to  Portsmouth,  had  been  built 
by  the  State  of  Ohio,  joining  the  Ohio  River  with  Lake  Erie. 
The  effect  in  stimulating  production  and  diverting  trade  from 
its  old  routes  was  immediate;  three  years  later  there  was 
shipped  from  Ohio  alone  86,000  barrels  of  flour,  98,000  bushels 
of  wheat,  and  2,500,000  staves  through  by  canal  to  New  York. 

At  the  same  time  the  western  farmer  was  enabled  to  secure 
better  prices  for  his  goods:  products,  which  before  had  glutted 
the  local  market,  could  now  be  sent  to  distant  points  where  they 
were  in  greater  demand.  Flour,  which  in  1826  sold  at  Cin- 
cinnati for  $3  a  barrel,  brought  $6  in  1835,  and  corn  rose  from 
12  cents  to  32  cents  a  bushel.  He  could  also  purchase  his 
axes,  plows,  and  other  implements  for  a  fraction  of  what  he 
had  formerly  paid.  These  facts  had  a  powerful  effect  upon  the 
settlement  of  the  West,  which  was  now  assured  profitable 
markets  and  communication  with  the  East. 

177.  Internal  improvements  by  the  States.  —  When  the 
demand  for  internal  improvements  became  urgent,  the  States 
were  turned  to  for  assistance  in  carrying  out  the  plans.  The 
reasons  for  invoking  State  aid  were  several.  In  thp  first  place--^ 
as  we  have_seen,  tjie  Federal  government,  which  hnd  i^t^^^^^^-- 
taken_willingly_enough  the  work  of  improviTio;  th^  mpnn^  ni — 
communication,  had  been  estopped  from  continuii\p;  \f  by 
constitutional  objections,_  Private  capital  was  not  equal  to 
the  task  of  carrying  out  such  large  enterprises  as  were  now 
14 


c 

^ 


194       ECONOMIC  HISTORY  OF   THE   UNITED  STATES 

being  planned.  Even  if  it  existed  in  large  enough  amount, 
which  was  doubtful,  the  projects  were  too  large  and  the  re- 
turns too  remote  to  warrant  the  risking  of  his  whole  capital  by 
an  individual.  While  these  works  of  public  improvement 
might  have  been  entrusted  to  corporations,  there  was  the 
feeling,  in  addition  to  a  distrust  of  corporate  management, 
that  many  iniprovements  should  be  made  that  might  not  he. 
commercially  profitable,  andjthat  the  State  alone  could  under- 
taj^e~these.  ^loreover,  the  State  had  perpetual  life  and,  with 
its  high  credit,  could  borrow  the  necessary  capital  on  much 
better  terms  than  could  private  individuals.  It  seemed 
eminently  fitting,  therefore,  that  the  State  governments  should 
undertake  the  work  of  internal  improvements.  But  there  are 
some  additional  forces  which  should  be  mentioned,  which 
explain  the  willingness  of  the  State  legislatures  to  enter  upon 
this  work. 

The  people  of  the  whole  country,  particularly  of  the  West, 
were  insistent  upon  having  improvements  of  every  sort,  and 
especially  better  means  of  transportation.  Most  of  the  State 
constitutions  adopted  during  this  period  contained  either  direc- 
tions or  permissions  to  the  legislatures  "  to  encourage  internal 
improvements  within  the  State."  The  Federal  government, 
though  it  had  withdrawn  from  the  work  directly,  gave  assist- 
ance to  the  States  in  land  and  money:  it  donated  a  percentage 
of  all  sales  of  public  lands  to  the  States  for  this  purpose,  and 
distributed  among  them  the  surplus  revenue  of  the  Federal 
government  in  1837.  Finally,  the  success  of  the  Erie  Canal, 
the  commercial  rivalry  of  the  Atlantic  ports,  and  the  specula- 
tive fever  of  the  period,  led  the  legislatures  to  embark  in 
enterprises  far  beyond  the  needs  or  means  of  the  people  at  that 
time. 

178.  Investment  of  borrowed  capital.  —  The  magnitude  of 
the  work  of  internal  improvements  undertaken  by  the  States 
may  perhaps  be  best  shown  by  the  increase  in  State  indebted- 
ness. Up  to  1820  the  States  had  incurred  practically  no 
liabilities,  but  beginning  with  that  year  their  debts  began  to 


TRANSPORTATION   AND   INTERNAL  IMPROVEMENTS        195 


grow:  in  1820  they  were  $12,790,728;  in  1830,  $26,470,417;  in 
1835,  $66,482,186.  During  the  next  three  years  they  ahiiost 
trebled,  reaching  over  $170,000,000  in  1838,  and  $200,000,000 
in  1840.  Practically  all  of  this  money  went  into  internal  im- 
provements —  roads,  canals,  railroads,  and  banks. 

The    following    table    shows    succinctly   the    purposes    for 
which  the  State  debts  had  been  contracted  up  to  1838: 

Objects  of  State  Debts,  up  to  1838 


States  1 

For  Banks 

For  Canals 

For 
Railways 

For 
Roads 

Miscel- 
laneous 

Total 

Alabama 

$7,800,000 

$3,000,000 

$10,800,000 

Arkansas 

3,000,000 

3,000,000 

Illinois 

3,000,000 

$900,000 

7,400,000 

$300,000 

11,600,000 

Indiana 

1,390,000 

6,750,000 

2,600,000 

$1,150,000 

11,890.000 

Kentucky 

2,000,000 

2,619,000 

350,000 

2,400,000 

7,369,000 

Louisiana  .... 

22,950,000 

50,000 

50,000 

235,000 

23,285,000 

Maine 

554,976 

554,976 

Maryland  .... 

5,700,000 

5,500,000 

292,980 

11.492,980 

Massachusetts 

4,290.000 

4,290,000 

Michigan 

2,500,000 

2,620,000 

220,000 

5,340,000 

Mississippi  .  .  . 

7,000,000 

7,000,000 

Mis.souri 

2,500,000 

2,500,000 

New  York .... 

13,316,674 

3,787,700 

1,158,032 

18,262,406 

Ohio 

6,101,000 

6,101,000 

Pennsylvania . 

16,579.527 

4,964,484 

2,595,902 

3,166,787 

27,306,700 

South  Carolina 

1,550,000 

2,000,000 

2,203,770 

5,753,770 

Tennessee  .... 

3,000,000 

300,000 

3,730,000 

118,166 

7,148,166 

Virginia 

3,835,350 

2,128,900 

354,800 

343,139 

6,662,189 

Total 

$52,640,000 

$60,201,551 

$42,871,084 

$6,618,868 

$8,474,684 

$170,356,187 

It  is  evident  that  this  enormous  expenditure  of  funds 
involved  a  large  investment  of  capital.  Little  of  it  indeed  was 
raised  by  taxation;  practically  all  w^as  borrowed,  part  at  home, 
l)ut  most  of  it  from  foreign  capitalists.  The  extent  to  which 
foreign  capital  was  being  invested  in  the  United  States  and 
domestic  capital  and  labor  was  being  applied  to  the  work  of 
developing  the  West  is  well   illustrated  by  the   state  of  our 

1  The  eight  other  States,  which  at  that  time  belonged  to  the  Union,  had 
no  debt,  namely  Connecticut,  Delaware,  Georgia,  New  Hampshire,  North 
Carohna,  Rhode  Island,  and  Vermont. 


196       ECONOMIC  HISTORY   OF   THE    UNITED  STATES 

foreign  trade.  During  the  decade  1830  to  1840  the  imports 
exceeded  the  exports  about  $200,000,000,  and  at  the  same 
time  the  imports  of  specie  exceeded  the  exports  by  more  than 
$50,000,000,  while  in  spite  of  our  agricuUural  pre-eminence 
we  imported  over  five  and  a  half  million  bushels  of  wheat 
during  the  same  period.  The  high  credit  then  enjoyed  l)y  the 
American  States,  which  had  been  greatly  enhanced  by  the 
payment  of  the  national  debt  in  1833,  enabled  them  to  borrow 
these  enormous  sums  abroad,  and  especially  in  England  where 
capital  had  been  accumulating,  at  comparatively  moderate 
rates  of  interest.  President  Jackson  in  1839  estimated  that 
about  $200,000,000  were  due  from  States  and  corporations  to 
creditors  in  Europe. 

179.  Failure  of  State  enterprise.  —  The  crisis  of  1837  put  a 
complete  stop  to  the  work  of  internal  improvements.  As  soon 
as  the  bubble  of  speculation  and  high  prices  was  pricked,  it 
was  clear  that  many  of  the  enterprises  were  premature  and 
unnecessary.  Most  of  them  were  extravagantly,  if  not 
corruptly,  managed,  while  hundreds  of  thousands  of  dollars 
had  been  sunk  in  absolutely  useless  undertakings.  When  the 
debts,  so  easily  contracted,  began  to  press,  several  of  the 
States  repudiated  their  indebtedness;  the  worst  offenders  were 
Mississippi,  Louisiana,  Maryland,  Pennsylvania,  Indiana,  Illi- 
nois, and  Michigan,  though  some  of  them  afterwards  paid  in 
part  or  in  whole.  The  unwillingness  on  the  part  of  the  other 
States  to  be  branded  with  the  defaulting  States  as  "  repudia- 
tors,"'led  to  a  demand  in  1842  that  the  Federal  government 
assume  all  the  State  debts,  but  nothing  came  of  the  agitation. 

The  works  already  built  were  sold  by  most  of  the  States, 
and  these  speedily  withdrew  from  the  business  of  supplying 
roads  and  canals.  The  changed  attitude  of  the  people  regard- 
ing the  advisability  of  State  enterprises  found  expression  in 
the  inclusion  of  provisions  in  practically  all  the  State  constitu- 
tions adopted  after  this  period,  prohibiting  the  use  of  State 
funds  or  credit  for  internal  improvements.  Having  failed  in 
the   ]:)usiness   once,   they   Avere   to    be   debarred    from   further 


TRANSPORTATION  AND  INTERNAL  IMPROVEMENTS     197 


attempts  along  the  same  line.  Accordingly,  when  the  develop- 
ment of  railroads  began  just  at  this  time,  the  successive  with- 
drawal of  the  Federal  government  and  the  failure  of  the  State 
governments  in  this  sphere  left  the  work  of  building  them  to 
the  enterprise  of  private  individuals  and  corporations. 

180.    Importance   of  railways.  —  Almost  before  the  use  of 


which   was   to   revolutionize 
For  a   decade   attempts   at 


canals  had  begun,  the  railway 
transportation,  was  introduced, 
railroad  building  were 
largely  experimental  and 
they  did  not  seriously 
compete  with  the  canals 
and  rivers  until  after 
1S4().  The  revolutionary 
effect  which  the  introduc- 
tion of  the  railway  had 
upon  the  economic  de- 
velopment of  the  country 
may,  however,  be  briefly 
noted  at  this  point;  its  fuller 
description  belongs  to  a 
later  chapter.  The  turn- 
pikes and  canals  had  simply 
followed  existing  or  natural 
routes  of  trade.     They  had  Sail  Car 

made  communication  easier    ^^^^en  railroads  were  first  built  expori- 

ments  were  made  with  sails  and  horses 
and  had  enormousl}''  in-  as  motive  power.  The  most  successful 
creased  the  traffic   between    sail  car  was  built  by  Evan  Thomas^ for 

use  on  the  Baltimore  and  Ohio  Kailroacl. 
the  different  sections  of  the  Itsailedcqually  well  in  either  direction, 
r'nnntrv  Tbp  rivpr^  to-  according  to  the  direction  of  the  wind. 
COUntr\  .       i  ne     11\  ers,      to      ^^^  ^^.^  usefulness  lay  in  showing  how 

get  her      with      the      canals,    little  power  was  needed  to  propel  a  car 

furnished    a    splendid    sys-  T^eTro'ds  of  thTm"' "''""" ''"^ 
tem  of  transportation,  but 

as  most  of  these  flowed  north  and  south,  something  more  was 
needed  if  the  East  was  to  be  brought  into  close  touch  with  the 
developing  West. 


198       ECONOMIC  HISTORY   OF    THE    UNITED  STATES 

It  remained  for  the  railways  to  break  down  the  sectional 
barriers  and  to  divert  the  industrial  development  of  the  country 
into  new  channels.  They  were  built  east  and  west,  they  crossed 
the  mountains  and  united  parts  of  the  country  hitherto  sepa- 
rated. With  the  introduction  of  the  railway  the  country  enters 
upon  an  entirely  new  phase  of  development.     Owing  to  the 


Horse  Car 
In  the  early  days  of  the  Baltimore  and  Ohio  Railroad,  when  no  one 
did  more  than  dream  of  steam,  horses  were  expected  to  furnish  the 
motive  power.  The  first  regular  passenger  service  on  a  railroad  in 
the  United  States  was  instituted  between  Baltimore  and  Ellicott's 
Mills,  in  May,  1830.  The  cars  were  propelled  by  horses  and  made  the 
distance  of  13  miles  in  one  and  one-quarter  hours. 


fact,  too,  that  the  country  was  predominantly  agricultural, 
the  chief  market  for  most  of  the  produce,  especially  of  the  West 
and  South,  was  on  the  seaboard  or  in  Europe.  The  very 
homogeneousness  of  pursuits  rendered  the  interior  markets 
small.  This  fact,  coupled  with  the  enormous  distances  which 
separated  different  sections,  made  a  cheap  and   quick  means 


TRANSPORTATION  AND  INTERNAL  IMPROVEMENTS        199 

of  transportation  indispensable  to  the  full  development  of  the 
resources  of  the  country.  Had  it  not  been  for  the  railway 
the  full  development  of  the  far  West,  and  of  other  parts  of 
the  country  untouched  and  inaccessible  by  river  or  canal,  would 
have  been  impossible. 

181.   Early  railroad   building.  —  The   first    railroad   in   the 
United  States  was  the  Baltimore  and  Ohio,  begun  in  1828  and 


JoHx  Stevens's  Locomotive 
This  locomotive  was  built  by  John  Stevens  at  Hoboken,  N.J.,  in 
1825.  It  was  exhibited  to  a  committee  of  the  Pennsylvania  Society 
for  Internal  Improvement,  while  the  question  of  constructing  a  rail- 
way from  Philadelphia  to  Columbia  was  under  consideration.  It 
was  the  first  steam  locomotive  in  America,  of  which  there  is  a 
reliable  record,  which  carried  people  on  a  track. 

opened  for  traffic  in  1830,  although  the  Quincy  tramway,  used 
for  transporting  building  stone  to  the  Bunker  Hill  monument, 
and  a  couple  of  gravity  roads  in  the  coal  regions  of  Pennsyl- 
vania had  anticipated  it  shortly.  On  the  Baltimore  and 
Ohio  horse  power  and  sails  were  used  at  first  as  a  motive  power, 
and  not  until  after  eighteen  months  of  experiment  was  steam 
finally  decided  upon.     The  greatest  development  took  place 


200       ECONOMIC  HISTORY   OF    THE    UNITED  STATES 

in  Pennsylvania,  especially  in  building  roads  from  Philadel- 
phia to  the  coal  regions  in  the  central  part  of  the  State;  in 
1835  there  were  about  two  hundred  miles  of  railroad  in  the 
State.  Connection  was  made  with  New  York  in  1839.  Fur- 
ther south  great  activity  was  displayed.  The  Charlesijoa  and 
Hamb^rg_r  ail  road,  one  hundred  and  thirty-seven  miles  in 
length,  was  the  longest  line  under  one  management  in  the 
world  when  it  was  opened  for  traffic  in  1833.  Massachusetts, 
New  York,  New  Jersey,  and  Virginia  contained  most  of  the 
other  roads  built  during  the  first  decade  of  railroad  construction. 
By  1840  the  railway  mileage  of  the  country  had  reached 
2818  miles,  but  most  of  the  roads  were  disconnected,  short 
lines,  similar  to  the  early  street  railroads.  In  their  construc- 
tion, too,  they  resembled  these;  the  rails  were  wooden  beams, 
placed  lengthwise  or  end  to  end,  wdth  a  strap  of  iron  nailed  on 
the  upper  surface  to  protect  the  wood  from  wear.  The  English 
locomotives,  which  were  the  first  to  be  used  in  this  country, 
being  found  too  heavy  and  otherwise  unsuited  to  American 
rails  and  road-beds,  American  engineers  soon  began  to  build 
their  own.  From  the  very  first  original  methods  have  been 
followed  on  American  railroads,  both  in  the  construction  of  the 
road-bed  and  of  the  rolling-stoci:. 

SUGGESTIVE  TOPICS   AND  QUESTIONS.     CHAPTER   XIV 

1.  Why  were  improved  highways  called  "turnpikes"?  [Johnson, 
Amer.  Ry.  Transp.,  13.] 

2.  What  were  the  suggestions  made  by  Gallatin  in  his  report  of  1S07? 
[Amer.  State  Papers,  XX,  724,  910-921;  H.  Adams,  Life  of  Gallatin,  350- 
352;  Amer.  State  Papers,  Misc.,  I,  724-741.] 

3.  What  effect  did  the  building  of  the  Erie  Canal  have  on  the  com- 
mercial supremacy  of  New  York,  Philadelphia,  and  Baltimore?  [Tenth 
Census  (1880)  IV,  1-3;  Hulbert,  Great  Amer.  Canals,  chap.  4;  H.  C. 
Adams,  Pub.  Debts.  330;  Andrews,  Rept.  on  Lake  Trade,  282;  Johnson, 
Great  Events,  XVI,  94-111.] 

4.  To  what  extent  has  the  Erie  Canal  added  to  the  wealth  of  New 
York  State?  [Fairlie,  The  New  York  Canals,  in  Quart.  Journ.  Econ.,  XIV, 
214.] 

5.  Do  you  know  of  any  canals  in  the  United  States,  other  than  the 


TRANSPORTATION   AND   INTERNAL   IMPROVEMENTS        201 

Erie  and  Sault  Ste.  Marie  canals,  which  are  extensively  used  to-day?  [Hul- 
bert,  Great  Amer.  Canals;  Johnson,  Inland  Waterways;  Johnson,  Ocean  and 
Inland  Water  Transportation,  332.] 

6.  Why  did  Madison,  Monroe,  and  Jackson  veto  Federal  appropria- 
tions for  internal  improvements?  Are  such  appropriations  made  to-day? 
[Messages  and  Papers  of  the  Presidents,  I,  584  (Madison);  II,  142,  483-493 
(Monroe).] 

7.  What  was  the  "distribution  of  the  surplus"?  [Bourne,  The  Sur- 
plus of  1837;  Knox,  U.  S.  Notes,  chap.  12;  Dewey,  217-222;  Bolles,  Fin. 
Hist.,  II,  547;  Roosevelt,  Benton,  143-156;  Schurz,  Clay,  II,  118-123; 
Sumner,  Jackson,  32.5-331.] 

8.  Describe  the  improvements  made  during  this  period  in  some  one 
State.  [H.  C.  Adams,  Pub.  Debts,  325  (Mich.);  Morris,  Intern.  Improv. 
in  Ohio,  Proc.  Amer.  Hist.  Ass.,  Ill,  112;  Tenth  Census,  IV,  Rep.  on  Canals 
and  Railroads,  VII,  Hist,  of  State  Debts.] 

9.  Describe  the  repudiation  of  its  debt  by  some  typical  State.  [Scott, 
Repudiation  of  State  Debts;  Sumner,  Amer.  Currency,  162;  Schurz, 
Clay,  II,  211;  Schouler,  IV,  419-420;  Stoddard,  Life  of  Chas.  Butler.] 

10.  Can  a  State  repudiate  its  debt?  Has  the  creditor  no  redress  in 
the  courts?  How  about  the  Federal  government?  An  individual?  [Cooley, 
Const.  Law,  65;  Adams,  Pub.  Debts,  8-11.] 

11.  Describe  the  early  attempts  at  railroads  in  this  country  more 
fully.  [Johnson,  Amer.  Ry.  Transp.,  chap.  2;  Hadley,  R.R.  Transp.,  chap. 
2;  Tenth  Census  (1880),  IV;  Poor's  Manual  of  Railroads,  1881,  Intro., 
Brown,  Hist,  of  Locomotive;  Adams,  Railroads.] 

12.  What  was  thought  of  Geo.  Stephenson's  railway  in  England,  and 
how  successful  was  he?  [Adams,  Railroads,  chap.  1;  Brown,  Hist,  of  Loco- 
motive.] 

13.  Has  the  government  Ijuilt  and  operated  railroads  successfully 
in  any  country?  Do  you  think  the  L'nited  States  government  should 
own  the  railroads  in  this  country  now?  [Hadley,  R.R.  Transp.,  chaps. 
10-13;  Johnson,  Amer.  Ry.  Transp.,  chap.  24.] 

14.  What  is  a  corporation?  Are  they  desirable?  [Hadley,  R.R. 
Transp.,  42-48;  Johnson,  Amer.  Ry.  Transp.,  chap.  6;  Talcott  Williams, 
"The  Corporation,"  in  Organized  Labor  and  Capital.] 

SELECTED   REFERENCES.     CHAPTER  XIV 

**Andrews:  Report  on  the  Colonial  and  Lake  Trade,   Parts  2,  4,  and 

Appendix. 
**Callender:  State  Enterprises  and  Corporations,   in  Quarterly  Journal 

of  Economics,  XVII,  131-162. 
*Johnston:  Internal   Improvements,    in   Lalor's   Cyclopedia   of   Political 

Science,  II,  568-573. 


202       ECONOMIC  HISTORY   OF    THE    UNITED  STATES 

*Poor:  Manual  of  Railroads,  1881,  Intro. 

* ^  Report  on  the  Internal  Commerce  of  the  United  States,  Treas.  Dept., 

Bureau  of  Statistics,  1887,  pp.  178-233. 
*Turner:  The  Rise  of  the  New  West,  chaps.  13,  17. 

Adams,  H.  C:  Pubhc  Debts,  317-342. 

Tenth  Census  (1880),  vol.  IV,  on  Transportation. 

Chevalier:  Society,  Manners,  and  Politics  in  the  United  States,  chaps. 
20,  21. 

Hulbert:  Great  American  Canals. 

McDonald:  Jacksonian  Democracy,  chap.  8. 

Me^Jaster:  History  of  the  People  of  the  United  States.  [See  Index,  "Inter- 
nal improvements,"  "Roads,"  "Travel,"  etc.] 

Tanner:  A  Description  of  the  Canals  and  Railroads  in  the  United  States. 


CHAPTER   XV 

SHIPPING   AND   INLAND   COMMERCE   (1840- 1860) 

182.  American  shipping  after  the  Embargo  and  the  War  of 
1812.  —  We  must  now  take  up  again  the  story  of  the  American 
merchant  marine  from  the  point  to  which  we  had  traced  its 
history.  During  the  continental  wars  our  shipping  had 
increased  rapidly;  the  Embargo  Act  interrupted  its  growth 
temporarily,  but  in  1810  the  tonnage  engaged  in  the  foreign 
trade  was  981,019  tons,  a  figure  not  equaled  again  until  1847. 
The  War  of  1812  led  to  a  destruction  of  much  of  our  shipping. 
In  three  years  we  lost  over  1400  merchant  vessels  and  fishing 
boats,  and  1814  saw  the  tonnage  engaged  in  foreign  trade 
reduced  to  674,633  tons,  the  lowest  point  reached  since  the 
Revolution.  Upon  the  conclusion  of  peace,  the  European 
countries  took  up  their  own  carrying  trade  again  in  large  part 
and  thus  deprived  our  own  ship-owners  of  this  employment. 
For  the  next  tw^enty-five  years  the  foreign  tonnage  remained 
about  the  same,  with  only  slight  temporary  fluctuations,  so 
that  in  1839  the  registered  foreign  tonnage  was  702,400  tons, 
or  only  27,767  tons  more  than  in  1814.  As  the  population  was 
increasing,  however,  this  really  represented  a  relative  falling 
off,  from  a  per  capita  tonnage  of  13.43  tons  in  1810  to  4.25  tons 
in  1839.  The  capital  of  the  country  was  being  invested  during 
this  period  in  manufactures,  internal  improvements,  and  the 
development  of  our  internal  resources,  which  offered  larger 
returns  than  the  carriage  of  ocean  freight.  The  high  tariff, 
too,  which  imposed  duties  upon  the  materials  entering  into 
ship-building,  considerably  increased  the  cost  of  construction 
and  equipment;  and  at  the  same  time,  by  stimulating  our 
domestic  industries,  reduced  the  amount  of  foreign  commerce 

203 


204       ECONOMIC  HISTORY   OF    THE    UNITED  STATES 

to  be  transported.  About  1S30,  moreover,  England  began  to 
increase  her  shipping  and  to  bid  vigorously  for  the  ocean- 
carrying  trade. 

183.  Commercial  legislation  and  treaties.  —  During  this 
period  a  new  step  was  taken  in  shipping  legislation  by  the 
establishment  of  reciprocal  liberty  of  commerce.  By  the  act 
of  March  3,  1815,  all  the  discriminating  duties  imposed  by 
former  laws,  both  on  the  tonnage  of  foreign  vessels  and  on  the 
goods  imported  in  them,  were  repealed  in  the  case  of  any  foreign 
nation  which  should  abolish  its  countervailing  duties  against 
us.  In  accordance  with  this  act,  the  treaty  of  peace  wdth 
England  of  July  3,  1815,  provided  among  other  things  for 
equality  of  duties  and  treatment  and  no  discrimination  be- 
tween England  and  the  United  States.  But  England  kept 
her  West  Indian  ports  closed  to  our  vessels  after  the  treaty 
as  before,  and  we  soon  retaliated  by  new  discriminating  duties. 
In  1830  England  agreed  to  open  these  ports  and  we  removed 
many  of  the  restrictions  upon  British  commerce.  As  a  result 
our  imports  from  the  British  West  Indies  increased  from  $1901 
in  that  year  to  $2,965,585  in  1810. 

To  meet  the  absolute  probition  of  those  States  which  simply 
closed  their  ports  to  us,  Congress  in  1817_rpade  our  navigation 
laws  more  severe:  the  coasting  trade  was  absolutely  forbidden 
to  other  nations,  and  ships  engaged  in  foreign  trade,  unless 
two  thirds  manned  by  American  sailors,  were  taxed  fifty  cents 
a  ton.  But  in  this  act  also  the  door  was  left  open  for  repeal  in 
the  case  of  foreign  nations  which  should  remove  their  restric- 
tions upon  our  vessels,  and  in  1828  another  act  provided  for 
reciprocity  with  foreign  nations  in  the  indirect  or  carrying 
trade.  Treaties  were  accordingly  negotiated,  which  provided 
for  "  reciprocal  liberty,"  with  France  in  1822,  Prussia  in  1828, 
and  in  subsequent  years  with  Hamburg,  Bremen,  Lubeck. 
Norway  and  Sweden,  Austria,  Russia,  Portugal,  Holland, 
Belgium,  and  Switzerland.  Commercial  treaties  were  also 
signed  with  most  of  the  Central  and  South  American  States. 

184.  The  American  clipper.  —  American   ship-builders   had 


SHIPPING   AND   INLAND   COMMERCE 


205 


during  this  time  developed  fl_typp  of  vpsrpI  which  was  superior 
to  all  others  with  which  it  came  in  competition  —  the  mag- 
nificent sailing  clipper.  In  the  building  of  wooden  vessels 
both  the  cost  of  materials  and  the  skill  of  our  ship-builders 
gave  us  an  advantage.  So  superior  in  speed  were  they  that, 
according  to  Levi  Woodbury,  an  American  vessel  could  make 
three  trips  to  England  in  the  time  a  British  vessel  was  making 
two;  while  the  change  from  square   to  schooner  rig  and  the 


American  Clipper  Ship 
The  square-rigged  vessel  reached  its  highest  development  in  the 
clipper  ships  which  were  turned  out  in  large  numbers  about  1845. 
The  clipper  was  built  with  sharp  lines  to  give  it  the  maximum  speed, 
and  with  a  long,  overhanging  prow,  from  which  the  vessel  gained 
its  name.     They  were  especially  designed  for  the  trade  with  China. 

use  of  improved  blocks  and  mechanical  appliances  reduced  the 
number  of  seamen  to  two  thirds  those  required  on  a  foreign 
ship.  The  high  character  of  masters  and  crews  also  made 
American  vessels  preferred  by  shippers. 

Beginning  with  about  184Q_a.  number  of  events  occurred 
which  combined  to  stimulate  greatly  the  ship-building  industry 
in  the  United  States,  and  to  give  to  American  sailing  vessels 
the  foremost  place  as  ocean  carriers  in  the  world.     In    1840 


206       ECONOMIC  HISTORY   OF   THE   UNITED  STATES 

the  British-China  war  diverted  a  large  part  of  the  China  trade 
into  American  hands  and  led  to  the  building  of  the  China 
clippers.  This  foreign  trade  was  increased  by  the  revolutionary 
outbreaks  in  Europe  in  1848^ by  the  Crimean  War  in  1853  and 
1856,  and  by  the  rebellion  in  IndiaJnJ857.  The  discovery  of 
gold  in  California  and  Australia  and  the  enormous  emigration 
to  those  countries  led  to  an  unprecedented  passenger  traffic  at 
fabulous  rates,  which,  with  the  large  immigration  into  the 
United  States  after  1846,  gave  immense  profits  to  ship-owners 
during  these  years.  At  the  same  time  the  lowering  of  the  tariff 
in  1846  had  reduced  somewhat  the  cost  of  ship-building  in  the 
United  States.  As  a  result  of  this  stimulus,  there  was  a  great 
over-production  of  ships:  the  tonnage  engaged  in  foreign  trade 
grew  from  763,838  tons  in  1840  to  2,494,894  tons  in  1861,  the 
highest  figure  for  foreign  tonnage  that  has  ever  been  reached 
in  our  history.  Including  the  ships  engaged  in  the  domestic 
trade  and  the  fisheries,  our  tonnage  was  one  third  that  of 
the  world,  and  was  practically  equal  to  that  of  Great 
Britain. 

185.  The  introduction  of  the  iron  steamship.  —  During  this 
very  period  of  the  supremacy  of  the  American  sailing  vessel,  a 
change  was  being  effected  in  ship-building  which  was  destined 
to  revolutionize  the  ocean  carrying  trade.  This  was  the  sub- 
stitution  of  steam  for  saij^.  ^pHof  iron  for  wooden  huH^,  Al- 
though steamers  had  been  used  for  some  time  in  the  coasting 
trade,  it  was  not  until  1838  that  the  Sirius  and  the  Great 
Western  crossed  the  ocean  propelled  by  steam  alone,  the 
latter  taking  only  fifteen  days  for  the  voyage.  The  utilization 
of  coal  in  the  production  of  steam  (1836)  and  the  invention  of 
the  screw  propeller  (1836-8)  contributed  materially  to  the 
success  of  ocean  steam  navigation.  In  the  year  1838,  iron 
ship-building  for  ocean  commerce  began. 

^  England  immediately  took  the  lead  in  the  construction  of 
iron  steamers,  while  our  ship-builders,  confident  in  their  su- 
periority, clung  to  the  wooden  ship.  Nearly  25  per  cent,  of  the 
total  tonnage  of  vessels  built  in  Great  Britain  in  1853  were 


SHIPPING   AND  INLAND   COMMERCE 


207 


steamers  and  a  little  more  than  25  per  cent,  were  of  iron.  In 
the  United  States,  on  the  other  hand,  although  22  per  cent,  of 
the  total  tonnage  built  consisted  of  steamers,  hardly  an}^  were 
of  iron.  The  vessel  of  the  future  was  to  be  the  iron  or  steel 
steamer,  and  by  not  changing  the  material  in  the  construction 
of  their  ships  our  ship-builders  gradually  yielded  first  place  to 
Great  Britain,  which  seized  the  opportunity  of  regaining  her 
lost  position  on  the  seas.  The  British  government  encouraged 
the    industry    by   subsidizing    the    steamship    lines    for    mail 


The  Steamship  Asia 
The  Asia  was  a  wooden-hull  steamer  built  for  the  Cunard  Hne  about 
1847  for  New  York-Liverpool  service.  It  cost  $575,000,  had  horse- 
power of  816,  and  took  11  days  to  cross  the  ocean.  It  was  pro- 
vided with  side-lever  engines  and  was  driven  by  side-wheels,  and 
also  carried  generous  spars  and  canvas  in  case  of  accident.  It  is 
a  good  specimen  of  an  ocean-steamer  of  1850. 

service,  beginning  with  the  Cunard  line  in  1838  and  continuing 
down  to  the  present  time.  Although  our  tonnage  was  increas- 
ing rapidly,  in  1861  we  were  carrying  only  65  per  cent,  of  our 
foreign  commerce  in  American  bottoms,  as  against  92  per  cent, 
in  1807,  and  83  per  cent,  in  1840. 

186.  Foreign  commerce.  —  Our  foreign  trade  had  been 
greatly  reduced  by  the  Embargo  and  the  War  of  1812,  but 
after   the   declaration    of    peace    imports    and    exports   both 


208       ECONOMIC  HISTORY   OF   THE   UNITED  STATES 

increased  enormously,  owing  to  peculiar  and  temporary  circum- 

/  stances.^  After  1818  there  was  a  steady  decline  in  our  foreign 
commerce  until  about  1830,  due  to  tariff  legislation,  the  de- 
velopment of  manufactures  and  of  our  internal  resources,  the 
passage  of  the  English  corn  laws,  and  hostile  tariff  legislation 
of  European  countries.  In  the  early  thirties,  however,  the 
great  development  in  the  production  of  cotton,  which  now 
constituted  over  one  half  of  our  total  exports,  the  growth  of 
the  West,  and  the  large  investments  of  foreign  capital  in  our 
system  of  internal  improvements,  combined  to  raise  our 
foreign  commerce  to  over  $300,000,000  for  the  year  1836,  the 
highest  figure  yet  reached.  The  panic  of  1837  and  the  result- 
ing depression  reduced  our  foreign  trade  to  $125,000,000  in 
1843,  but  between  1847  and  1860,  with  the  brief  exception  of 
the  year  1857,  in  which  a  second  panic  occurred,  the  foreign 
trade  of  the  United  States  reached  the  highest  point  it  had 
ever  attained.  In  1861  our  imports  were  $353,616,119,  and 
our  exports  $333,576,057, /or  a  total  of  $687,802,176.  The 
causes  for  this  prosperity/ have  already  been  mentioned  and 

/need  not  be  repeated  here.  Large  as  was  our  foreign  com- 
merce, our  internal  trad/ was  growing  still  more  rapidly.  The 
condition  of  the  countw  was  well  stated  by  Secretary  Robert 
J.  Walker,  in  his  treasury  report  for  1847-8,  in  which  he  said: 
"  The  value  of  our  pioducts  exceeds  three  thousand  millions 
of  dollars.  Our  pomilation  doubles  once  in  every  twenty- 
three  years,  and  ouiV products  quadruple  in  the  same  period. 
Of  this  $3,000,000,0ib0  only  about  $150,000,000  are  exported 
abroad,  leaving  $2/850,000,000  at  home,  of  which  at  least 
$500,000,000  are  Minually  interchanged  between  the  several 
States  of  the  Umon."  Of  the  exports,  cotton  constituted 
about  one  half,  while  gold  bullion,  agricultural  products,  and 
manufactured  ai/ticles  made  up  about  one  third  of  the  total. 
The  major  part/ of  the  export  trade  was  carried  on  from  New 
York,  New  Orleans,  Boston,  Baltimore,  Mobile,  Charleston, 
and  Philadelpjiia,  in  the  order  named. 
iChap.  11,  sect.  134. 


SHIPPING   AND  INLAND   COMMERCE  209 

187.  Coasting  and  inland  trade.  —  After  the  discriminating 
duties  of  1789,  but  even  more  after  the  enactment  of  the  hiw 
of  1817,  which  prohibited  foreign  vessels  from  engaging  in  the 
coasting  trade,  the  number  of  American  vessels  enrolled  in 
this  traffic  increased  rapidly.  In  1789  the  tonnage  of  vessels 
so  engaged  was  68,637  tons;  in  1817  it  was  525,030;  and  by 
1840,  owing  to  the  great  expansion  of  the  lake  and  river  com- 
merce, it  had  increased  to  1,176,694  tons.  In  the  next  twenty 
years  the  tonnage  more  than  doul^led  again,  amounting  to 
2,644,867  tons  in  1860.  Ever  since  1820  the  tonnage  in  the 
coasting  trade  had  equaled  that  engaged  in  foreign  trade,  and 
after  1860  it  greatly  exceeded  the  latter.  At  the  same  time/ 
the  fishing  industry  was  growing  steadily,  the  tonnage  of 
vessels  engaged  in  the  whale,  cod,  and  mackerel  fisheries  in- 
creasing from  9062  tons  in  1789  to  329,605  tons  in  1860. 

It  is  impossible  to  say  just  how  this  traffic  was  divided d- 
between  the  coasting  and  inland  trade,  but  the  commerce  of 
the  lakes  and  rivers  had  been  steadily  increasing  during  this 
period.  After  1840,  when  the  railroads  first  began  to  invade 
the  West,  a  steadily  growing  share  of  the  river  trade  was  di--^ 
verted  to  the  quicker  route.  In  1845  it  was  estimated  that  of 
the  produce  of  the  Mississippi  valley  shipped  to  the  seaboard 
one  half  found  its  way  to  market  via  the  canals  and  railroads 
to  the  Atlantic  coast.  Of  the  receipts  at  New  Orleans  but  18 
per  cent,  consisted  of  western  produce  in  1845,  as  compared 
with  over  60  per  cent,  at  the  beginning  of  the  century.  The 
great  expansion  of  cotton  culture  throughout*  the  Southwest, 
however,  prevented  any  falling  off  in  the  total  New  Orleans 
trade,  which  grew  from  $49,822,115  in  1840  to  $185,211,154  in 
1860.  The  lake  trade  did  not  develop  until  after  the  building 
of  canals,  which  afforded  an  outlet  from  the  interior  to  the 
lakes;  but  after  1840  there  was  a  great  increase,  as  is  shown 
by  the  table  on  page  211. 

The  agricultural  exports  of  Ohio  grew  from  the  equivalent 
of  543,815  bushels  of  wheat  in  1835  to  3,800,000  in  1840, 
and   12,193,202   in  1851;   and   this  was  simply  typical   of  the 


210       ECONOMIC  HISTORY  OF   THE   UNITED  STATES 


expansion  of  the  inland  trade.  While  the  tide  of  emigration 
flowed  from  east  to  west,  that  of  commerce  was  largely  in  the 
reverse  direction. 


Tonnage  of  Vessels  on  the 

Lakes  (in  tons) 

1820 

1830 

1840 

1850 

1863 

3500 

20,000 

75,000 

215,787 

611,398 

188.  Railroad  competition.  —  While  the  water  routes  con- 
tinued to  be  the  base  of  all  extensive  transportation  movements, 
the  railroads  were  now  beginning  in  a  few  cases  to  develop  a 
serious  rivalry.  The  carriage  of  coal  over  the  Reading  railroad 
in  competition  with  the  Schuykill  Canal,  and  of  flour  over  the 
New  York  Central  in  competition  with  the  Erie  Canal,  showed 
the  economic  possibilities  of  the  railway  in  the  solution  of  the 
problem  of  cheap  freight  movements.  For  the  most  part, 
however,  the  railroads  that  were  built  in  the  United  States 
prior  to  1850  were  regarded  as  feeders  to  the  lakes  and  rivers, 
or  as  connecting  links  between  the  lakes  and  the  Mississippi 
or  Ohio  rivers,  and  between  inland  waters  and  the  Atlantic 
seaboard.  The  total  amount  of  traffic  moved  on  the  waters 
in  or  about  the  United  States  still  greatly  exceeded  that 
carried  by  the  railroads;  not  until  1860_\vas  the  proportion 
reversed.  In  that  year  it  was  estimated  that  the  railroads 
carried  two  thirds  of  the  total  internal  trade.  The  freight 
business,  even  of  the  trunk  lines,  still  remained  comparatively 
small;  the  great  development  of  railways  was  not  to  come 
until  after  the  Civil  War.  For  instance,  the  total  east-bound 
freight  on  the  Pennsylvania  railroad  in  1859  was  353,161: 
tons;  westward  it  was  190,705  tons.  On  the  New  York  Central 
the  total  east-bound  tonnage  was  570,927  tons;  the  west -bound 
was  263,392  tons. 

In  spite  of  this  small  showing,  the  influence  of  the  railroads 
in  developing  the  West,   in  building  up  its   population   and 


SHIPPING   AND  INLAND   COMMERCE 


211 


*^. 


P 


335353^3  5  SfiaH 


'J;Jii>.Jii  J:L»*.I;  V^li^  Li\l>  C>-ibiX  >>_t;J:.:s^2, 


From  Philadelphia  to  Pittsbursh, 

THROVGH  IN  31  BAYS: 

'I.YD  BV  STE.I.^t  B0.1TS,  CIRItVLYO    THE  IWITED  STATES'  .'nAME,% 

Irom  PITT^Bl  R(,iH  to  LOIHHYIULE. 


Starts  every  morning,  from  the  corner  of  Broad  &  Race  St. 

In  ljr:irJn.l>;.l.-.iJi.l  e...!.l  whe.-lcj-s.  via  the  t.nnca^ter  nn.t  tl.,rnih,.r^  Ro>l  PooJs,  am.in?;.!   ilic  buerpbcj-.jl  4  oVIjck.  m  ihf  flftcmooru  «bert 
pi'i*e>ic«  r,  vill  t.\Ur  ihr  •*.«ikri<.  uliirli  li.ivciill  («»r  J/:e:l  f:|.  m  .i  very  s'tprnor  in^nnor.  havlra  been  buili  eiprffilyfor  ihf  oraymwioffoiian 
^itf  J'afsm^i-rs,  ai'ler  ihf  moi:  .i^^iovcd  moUcI^  of  Bojis  UftCtl  nn  ih<»  Erie  CanaJ,  andarr  ool  surpassed  by  ihe 
—  lUiais  usfd  uj«m  uoi^  oiIkt  Line. 

The    nc.ui>   .nn:  conimanj.d  l.j  ..I.I   .m.i  f.>pcn.-fHMl    Cupiui-.s,   s^vrr-.l  of  whom  hav?  been  conneciej  with  the   Line  for  the  iw>  Ltsl.irtsoft 
for  sp*-!-*!  iin't  coiiif'tTi.  ihit  Lint  is  not  cKCelled  by  «iny  trther  inihe  I' niifd  Stales. 

Passengers    fur   Cincinnati,  Louisville,  Natchez,  Nashville,  St.  Louis,  &c. 

"  ttt  jUmv>  l;pccrr:.|ii  «.l  bcm^  takt  n  on  *ith.>in  detjty,  as  ihis  Line  connects  »*iiH  ihe  Bo'is  at  Piiisbiirgh,  C8rT>inj{  ihe  Marl 


OFFICE,  IV.  E.  CORNER  OF  FOURTH  AND  CHESNUT  ST, 

e  Sircfi;   nl  llw  N.  E.  tomcr  nf  Tli 
tll^..s,,r.ro.,dS.r,c.. 


Traveling  in  1837 
This  advertisement  shows  the  character  of  the  transportation  service 
in  1837  and  the  following  decade.     In  those  days  the  journey  from 
Philadelphia  to  Pittsburg  took  three  and  a  half  days.     Now  it  takes 
less  than  nine  hours. 


212       ECONOMIC   HISTORY   OF   THE    UNITED   STATES 

moving  its  produce,  and  in  reducing  the  cost  of  transportation, 
was  enormous.  About  1850,  Mr.  Henry  C.  Carey  wrote: 
"  Twelve  years  since  the  fare  of  a  passenger  from  Chicago, 
Illinois  [by  lake  and  rail  to  New  York  City],  1500  miles,  was 
$74.50.  It  is  now  but  $17.  .  .  .  Twelve  years  since  the  cost 
of  transporting  a  bushel  of  wheat  from  Chicago  to  New  York 


Railroad  Station  at  Lancaster,  Pa. 
The  trip  from  Philadelphia  to  Pittsl^urg  was  made  hy  the  Pioneer 
Line  via  lyancaster  in   three  and  one-half  days.     Here  there  was  a 
meeting  of  the  old  and  new  methods  of  transportation,  the  emigrant 
wagon  and  the  railroad. 

was  so  great  as  effectually  to  keep  the  grain  of  that  count r}^ 
out  of  the  market.  Now  a  bushel  of  wheat  is  transported  the 
whole  distance,  1500  miles,  for  27  cents.  A  barrel  of  flour 
can  be  transported  from  Chicago. to  New  York  for  80  cents." 
Indeed,  it  may  be  said  that  without  the  railroads  the  increas- 
ing produce  of  the  West  could  not  have  been  marketed  at  all. 

189.  Railroad  building.  —  After  1840  a  numl)er  of  me- 
chanical, engineering,  and  manufacturing  improvements  were 
made  in  the  L'nited  States  which  greatly  facilitated  railroad 
construction.  Perhaps  the  most  important  was  the  substitu- 
tion of  iron  rails  for  the  flat^xips  which  had  previously  been 
used,  and  which  now  permitted  both  a  heavier  load  and  greater 
speed;  about  1844  the  manufacture  of  iron  rails  began  in  the 
United  States  to  supply  the  increasing  demand.  J)uring  the 
decade    1840-50   railroad    building   was    most    rapid    in    New 


^ 


SHIPPING    AND    INLAND    COMMERCE  213 

England-and  the  middl^Jitates—^nii  by  1850  there  were  9021 
miles  of  raih'oad  in  the  country.  In  the  following  decade  the 
middle  and  South  Atlantic  States  developed  their  transporta- 
tion systems  on  much  the  same  lines  as  they  at  present  exist, 
while  the  then  western  States,  between  the  AUeghanies  and 
the  Mississippi,  entered  upon  an  era  of  marvelously  rapid 
construction.  Chicago  was  connected  with  New  York  in  1853, 
and  the  following  year  the  Mississippi  was  reached.  In  1855 
St.  Louis  was  given  through  rail  connection  with  Xew  York, 
and  the  building  of  lines  into  the  Northwest  was  begun,  one  of 
which  reached  the  Missouri  River  in  1858.  The  total  mileage 
of  the  country  in  1860  was  30,635  miles,  or  more  than  three 
times  what  it  was  ten  years  before. 

Owing  to  causes  already  enumerated,^  railroad  building  at 
this  time  was  left  in  the  hands  of  private  individuals  or  cor- 
porations; but  although  the  States  did  not  engage  directly  in 
the  construction  of  railroads,  they  gave  valuable  assistance 
by  subscriptions  of  stock,  lojins  of  State  credit,  and  finally  by 
land  grants.  The  Illinois  Central  was  the  first  road  to  receive  a 
land  grant,  in  1850,  from  the  State  of  Illinois,  but  the  example 
was  quickly  followed  by  Missouri,  Arkansas,  Michigan,  Wis- 
consin, Iowa,  Florida,  and  Louisiana.  L^p  to  1861  there  had 
been  granted  for  internal  improvements,  mostly  railroads, 
31,600,842  acres  of  public  lands. 

190.  Improved  means  of  communication.  —  Probably  the 
most  important  single  event  of  this  period  was  the  invention 
of  the  electric  telegraph.  As  early  as  1832  Samuel  F.  B. 
Morse  was  experimenting  with  a  plan  of  telegraphic  communi- 
cation, and  in  1838  exhibited  his  invention  to  congressional 
committees;  in  1843  Congress  voted  him  an  appropriation  of 
$30,000  to  establish  a  line  betweeen  Washington  and  Baltimore,, 
which  was  put  into  successful  operation  in  June,  1844. ^     By 

iChap.  14,  sect.  179. 

^  The  electro-magnetic  telegraph  of  Cook  was  patented  in  England  in 
June,  1837,  and  in  July  of  the  same  year  Steinheil  put  his  telegraph  into 
operation  between  Munich  and  Bogenhausen. 


214      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 


pit 


mt 


SHIPPING    AND    INLAND    COMMERCE  215 

1860  about  50,000  miles  of  telegraph  were  built  in  the  Ignited 
States,  connecting  all  the  important  cities  of  the  Union;  the 
first  line  to  San  Francisco  was  completed  the  following  year.  < — /^^ 
The  postal  system  was  also  improved  and  extended  during 
this  period;  in  1860  there  were  about  186,000  miles  of  postal 
roads  in  operation.  Owing  also  to  improvements  in  the 
printing  press  —  the  cylinder  press  was  first  operated  in  1847 
—  and  in  the  manufacture  of  paper,  the  number  of  news- 
papers had  greatly  increased.  At  the  end  of  this  period  there 
were  nearly  400  daily  newspapers  issued  in  the  United  States, 
and  no  less  than  3266  daih^,  weekly,  bi-weekly,  and  monthly 
papers,  aggregating  some  10,000.000  copies.  In  1850  the  rate 
of  postage  on  a  prepaid  letter  was  reduced  to  three  cents  for 
any  distance  under  3000  miles.  The  effect  of  these  improved 
systems  of  communication  on  the  thought  and  development 
of  the  country  was  enormous. 

SUGGESTIVE  TOPICS  AND   QUESTIONS.     CHAPTER   XV 

1.  In  what  way  did  the  tariffs  of  1824,  1828,  etc.,  increase  the  cost 
of  ship-building-.'  [Taussig,  Tar.  Hist.,  76,  90,  93;  Taussig,  State  Papers, 
317-385  (Webster's  speech);  Dewey,  179;  Grosvenor,  Does  Protection 
Protect?  chap.  5.] 

2.  Describe  a  voyage  to  California  in  a  sailing  clipper.  [Dana,  Two 
Years  before  the  Mast.] 

3.  Tell  all  about  a  clipper  ship  and  a  specimen  voyage  to,  say,  China 
or  Australia.  [G.  F.  Train,  Autobiography;  Marvin,  253;  Johnson,  Ocean 
and  Inland  Water  Transp.,  20.] 

4.  What  was  the  substance  of  the  shipping  acts  providing  for  "re- 
ciprocal hberty  of  commerce?"  Do  you  consider  that  they  were  advan- 
tageous to  the  American  merchant  marine?  [Bates,  Amer.  Nav.,  chap.  8; 
Bates,  Amer.  Mar.,  173;  Marvin,  chap.  9.] 

5.  Why  did  England  turn  so  readily  to  the  construction  of  iron  ships 
and  the  United  States  so  slowly? 

6.  Why  was  the  use  of  steam  as  sole  motive  power  delayed  so  long 
for  ocean  voyages  after  its  use  on  rivers  and  along  the  coast? 

7.  Did  the  subsidy  policy  succeed  in  1854?  Would  it  be  desirable 
to  introduce  this  system  now?  [Bates,  Amer.  Mar.,  142,  148;  Coman, 
230-232;  Marvin,  chaps.  12,  18;  Johnson,  Ocean  and  Inland  Water  Trans^ 
portation,  chap.  22.] 


216     ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

8.  What  were  the  principal  shipping  ports  before  the  Civil  War? 

9.  What  were  the  causes  which  led  to  the  expansion  of  our  foreign 
commerce  after  1846?  [Webster,  Gen.  Hist,  of  Com.,  361;  Taussig,  Tar. 
Hist.,  116-122;  Rabbeno,  pp.  184-199.] 

10.  What  were  the  principal  exports  and  imports  of  the  United  States 
during  this  period?  [Pitkin,  Statistical  View,  chaps.  3,  6;  U.  S.  Treas. 
Reports.] 

11.  What  changes  were  taking  place  in  the  produce  that  went  down 
the  Mississippi  to  New  Orleans?  What  were  the  reasons?  [Intern.  Com- 
merce, Treas.  Rep.,  1887,  209.] 

12.  What  effects  did  the  railroads  have  upon  the  development  of  the 
West?  [Thompson,  Relation  between  the  Wheat  Industry  and  the  De- 
velopment of  Railroads.] 

13.  Describe  the  experience  of  some  State  in  its  early  dealings  with 
railroads.     [Million,  State  Aid  to  Railways,  1-26.] 

14.  Describe  the  invention  of  the  telegraph  and  the  difficulties  in  its 
early  application.  [Bryn,  Progress  of  Invention,  chap.  3;  Jones,  Hist. 
Sketch  of  Electr.  Telegr.,  chap.  8;  John.son,  Great  Events,  XVII:  1-10; 
Sargent,  Public  Men  and  Events,  II:  193.] 

SELECTED   REFERENCES.     CHAPTER   XV 

*Abbot :  American  Merchant  Ships  and  Sailors. 

*Coman:  Industrial  History  of  the  United  States,  130-138,  228-242. 
*Kelley:  The  Question  of  Ships,  chaps.  1-5,  11. 
*Lynch:  Report  on  Causes  of  Reduction  of  American  Tonnage. 
**Marvin:  American  Merchant  Marine,  chaps.  11,  12. 
**Soley:  American  Merchant  Marine,  in  Shaler's  The  United  States,  1: 
518-624. 

Bates:  American  Marine,  chaps.  2,  8-12,  22. 

Tenth  Census  (1880),  vol.  IV,  on  Transportation. 

Hadley:  Railroad  Transportation,  chaps.  1,  2. 
Lindsay:  History  of  Merchant  Shipping,  IV,  chaps.  3,  4, 
Ringwalt:  Transportation  Systems,  123-140. 
Wells:  Our  Merchant  Marine,  chaps.  1-5. 


CHAPTER   XVI 

CURRENCY  AND   BANKING 

191.  Currency  and  banking  to  1811.  —  A  new  country 
always  experiences  a  lack  of  money  as  compared  with  other 
forms  of  capital,  and  in  the  United  States  this  need  led  to 
various  devices  for  increasing  the  supply  of  currency.  Resort 
was  had  to  issues  of  paper  money  directly  by  the  government, 
or  by  banks  chartered  by  Federal  and  State  governments,  and 
to  coinage  of  the  precious  metals  at  United  States  mints. 
Owing  to  a  mistaken  economic  analysis  of  the  financial  needs 
of  the  country,  the  demand  for  abundant  and  cheap  mortey 
continued  persistently  until  the  Civil  War;  since  that  time  it 
has  been  confined  chiefly  to  the  newer  sections  of  the  country. 
The  excesses  of  the  colonies  in  the  issue  of  paper  money  had 
led  Parliament  in  1751  to  forbid  any  further  issue  of  legal 
tender  bills  of  credit  by  the  Xew  England  colonies;  in  1764 
this  prohibition  was  extended  to  all  the  colonies.  While  this 
caused  great  dissatisfaction  in  America  and  must  be  regarded 
as  one  of  the  causes  leading  to  the  Revolution,  it  abolished 
most  of  the  paper  money  issues.  With  the  outbreak  of  the 
Revolution,  however,  resort  was  had,  from  choice  as  well  as 
necessity,  to  paper  money  as  _a  means  of  revenue;  in  less  than 
five  years  Congress  authorized  issues  amounting  to  $241,552,- 
780,  while  the  States  in  addition  issued  $209,524,776.  Depre- 
ciation soon  set  in  and  by  1781  the  whole  mass  of  money  had 
become  practically  worthless.  Notwithstanding  this  disas- 
trous experience  seven  of  the  States  plunged  again  into  paper 
money  emissions  during  the  years  1781-1788.  The  adoption 
of  the  Constitution,  which,  as  a  result  of  these  bitter  experi- 
ences, forbade  the  emission  of  bills  of  credit  by  the  States,  put 

217 


218      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 


/ 


an  end  to  the  issue  of  government  paper  money  for  sixty  years. 
A  national  coinage  system  was  adopted  in  1792,  which  pro- 
vided for  the  decimal  system  of  coinage  and  a  double  standard 
at  a  ratio  of  fifteen  to  one. 

During  the  revolutionary  period  three  banks  had  been 
established,  but  with  the  formation  of  the  new  government 
there  was  need  of  a  strong  central  financial  institution  which 
should  be  able  to  act  as  the  fiscal  agent  of  the  government, 


A. 


Continental  Paper  Money 
The  Continental  Congress  was  not  given  the 
power  to  tax  the  people,  and  consequently  was  com- 
pelled to  issue  paper  money  in  order  to  carry  on 
the  war.  In  the  five  years,  1775-1779,  over  JS241  ,- 
000.000  was  issued,  and  it  finally  became  almost 
valueless.  ''Not  worth  a  continental"  was  a 
synonym  with  utter  worthlessness. 

ccordingly  the  First  United  States  Bank  was  chartered  in 
1791  for  twenty  years,  with  a  capital  of  $10,000,000,  of  which 
the  government  subscribed  one  fifth.  It  was  of  great  service 
to  the  treasury  department  in  making  loans,  and  acting  as  a 
depository  and  transfer  agent  of  the  public  funds.  This  insti- 
tution was  later  supplemented  by  the  organization  of  State 
banks. 

192.   Currency  and   banking,    1811-1836.  —  Upon   the   ex- 


CURRENCY    AND    BANKING  219 

piration  of  the  charter  of  the  First  United  States  Bank  in  1811, 
State  banks  sprang  up  in  great  numbers  —  120  new  banks 
being  chartered  and  put  into  operation  in  the  three  following 
years  —  and  undertook  to  furnish  the  country  with  bank- 
notes and  credit  currency.  Being  generally  unrestricted  in 
their  issues  by  legislation  or  even  by  a  well-informed  public 
opinion,  they  soon  over^issiied  their  notes.  An  inflation  of  the 
currency  with  the  attendant  phenomena  of  rising  prices  and 
speculation  ensued  in  1816-19,  to  be  brought  to  an  end  by  a 
panic  and  crisis  in  the  latter  year.  In  the  meantime  the  Second 
United  States  Bank  had  been  chartered  in  1816  for  twenty^ 
years.  By  its  charter  the  circulation  was  limited  to  the  capital 
of  the  bank,  $35,000,000;  notes  were  made  payable  in  specie 
on  demand,  and  were  receivable  in  all  payments  to  the  United 
States.  In  response  to  the  unreflecting  demand  on  the  part 
of  the  public  for  means  of  exchange,  the  State  banks  continued 
to  issue  their  notes  and  make  loans  freely,  upon  a  wholly  in- 
sufficient  specie  reaeme.  The  notes  were  generally  ovgx:^ 
ij^siied,  were  not  redeemed  in  specie  on  demand,  and  were 
consequently  of  doubtful  value  and  fluctuated  greatly.  Ac- 
cordingly, when  the  United  States  Bank  was  established  under 
strict  provisions  as  to  its  note  issues,  its  notes  passed  at  par 
and  were  much  sought  after.  The  Bank  acted  in  a  measure 
as  the  ''  regulator  of  the  currency,"  and  compelled  the  State 
banks,  on  pain  of  losing  their  circulation,  to  limit  their  issues 
and  maintain  specie  payments.  In  many  cases  it  insisted  that< 
the  State  banks  should  redeem  their  notes  in  specie,  thus  mak- 
ing itself  very  unpopular  in  the  South  and  West,  where  public 
opinion  did  not  support  such  action. 

193.  Inflation  of  the  currency.  —  At  the  expiration  of  the 
twenty-year  period  in  1836  Congress  refused  to  recharter  the 
United  States  Bank,  and  the  way  was  open  again  for  an  ex- 
pansion  of  State  Bank  circulation.  The  speculative  enthu- 
siasm of  the  times,  the  internal  improvements  by  the  States, 
and  the  investments  in  western  lands  created  a  great  demand 
for   capital   and   credit,   and   many  local   banks  were   hastily 


220       ECONOMIC  HISTORY   OF   THE    UNITED  STATES 


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1834  1340        1345        1850        1355        1850 

LOCAL   BANK   STATISTICS,  1834-1860. 


CURRENCY    AND    BANKING 


221 


organized  to  secure  the  enormous  profits  that  seemed  promised. 
The  active  speculation  in  the  public  lands  especially  led  to  the 
creation  of  banks  for  the  purpose  of  financing  these  investments. 
''  Borrowers  found  ready  accommodation  at  local  banks,  and 
with  the  loans  thus  secured  made  their  purchases  from  the 
land  receiver;  the  purchase-money  in  many  instances  was  there- 
upon re-deposited  in  the  bank  whence  it  came,  where  it  once 
more  served  as  a  loan  to  another  or  even  the  same  land  specula- 
tor." 1  The  inflation  brought  about  by  this  bank  expansion 
may  l)e  seen  in  the  following  table  (in  millions  of  dollars) : 


Year 

No.  of  banks 

Capital 

Circulation 

Loans 

1829 

329 

110.2 

48.2 

137.0 

1834 

506 

200.0 

94.8 

324.1 

1836 

718 

251.9 

140.3 

457.5 

1837 

788 

290.8 

149.2 

525.1 

1843 

691 

228.9 

58.6 

254.5 

194.  The  panic  of  1837.  The  coinage.  —  On  July  11,  1836, 
the  treasury  department  issued  the  so-called  sj^ecie  circular, 
which  was  an  order  to  the  government  agents  for  the  sale  of 
])ublic  lands,  that  they  should  thereafter  take  in  payment  for 
the  land  only  specie,  and  no  longer  receive  the  notes  issued  by 
non-specie  paying  i^a^ks.  This  check  upon  land  speculation, 
together  with  other  factors  —  the  ill-advised  distribution  of 
the  surplus  revenue,  the  over-investment  of  fixed  capital  in 
internal  improvements,  and  the  failure  of  American  crops  in  - 
1S35  and  1837  —  brought  about  a  panic  in  1837,  which  pros- 
trated all  business.  The  value  of  real  estate  in  New  York 
City  depreciated  more  than  $40,000,000  in  six  months;  by 
1842  it  had  sunk  to  $176,489,012.  The  circulation  was 
rapidly  contracted  from  $149,000,000  in  1837  to  $58,000,000 
in  1843,  while  the  sales  of  public  lands  steadily  fell  off  until 
they  reached  about  1,000,000  acres  in  1841. 

1  Dewey,  Financial  History  of  the  U.  S.,  p.  225. 


222      ECONOMIC    HISTORY    OF    THE    UNITED   STATES 

While  the  excessive  issues  of  bank-notes  had  driven  specie 
out  of  general  circulation  during  a  large  part  of  this  period,  coins 
were  alwaysto  be  found  in  the  commercial  centers  of  the  country. 
They  consisted  for  the  most  part  of  a  heterogeneous  collection 
of  foreign  coins,  often  clipped  and  mutilated;  no  American 
silver  dollars  were  coined  from  1806  to  1836,  and  gold  had 
disappeared  under  the  ratio  of  1792,  which  under-valued  it. 
By  the  acts  of  1834  and  1837  the  ratio  between  gold  and  silver 
was  changed  from  fifteen  to  one  to  sixteen  to  one;  as  this  slightly 
over-valued  gold,  it  came  rapidly  into  circulation  again  in 
place  of  silver,  and  the  silver  coins  began  to  disappear.  The 
policy  of  the  administration,  also,  in  insisting  on  the  use  of 
specie  in  government  transactions  and  on  the  maintenance  of 
specie  payments  by  banks  acting  as  government  depositories, 
enlarged  the  stock  of  coin  in  general  circulation.  As  yet, 
however,  but  little  gold  or  silver  was  mined  in  the  United 
States. 

195.  Discovery  of  gold  in  California.  —  In  January,  1848, 
James  ^larshall,  j\'hile  building  a  mill  for  John  A.  Sutter  in 
Eldorado  County,  noticed  shining  particles  of  gold  in  the  mill 
race.  When  this  discovery  was  followed  up,  rich  deposits  of 
gold  were  found  in  the  neighboring  region.  Immediately  the 
news  spread  to  the  surrounding  settlements,  and  more  gradu- 
ally to  the  East  and  to  Europe.  A  great  immigration  of  gold 
hunters  set  in;  around  Cape  Horn,  across  the  Isthmus  of  Pan- 
ama, and  over  the  western  plains  by  wagon,  they  thronged  to 
the  gold  fields.  By  the  end  of  1849  more  than  80,000  immi- 
grants—  the  ''forty-niners"  —  were  settled  in  California. 
The  first  and  most  important  result  of  this  discovery  was  an 
enormous  increase  in  the  production  of  gold:  in  1850  California 
produced  $36,000,000,  which  was  equal  to  the  annual  average 
production  of  the  whole  world  during  the  previous  decade. 
In  1851  the  production  reached  $56,000,000,  and  in  the  same 
year  gold  was  discovered  also  in  Australia.  As  a  result  of 
these  discoveries  there  was  a  large  addition  to  the  world's 
supply    of   specie,   thus    raising   the   general   level   of   prices; 


CURRENCY    AND    BANKING 


223 


immigration  was  greatly  stimulated,  the  far  West  was  more 
rapidly  settled,  and  the  construction  of  a  transcontinental 
railroad  was  hastened. 


Sutter's  Mill  and  Race 
Sutter's  saw-mill,  where  gold  was  first  discovered,  was  situated 
about  sixty  miles  from  Sutter's  Fort,  now  called  Sacramento.  The 
news  of  the  discovery  spread  like  wild-fire  and  led  to  a  remarkable 
rush  to  the  gold  fields.  So  momentous  were  its  effects  that  Presi- 
dent Polk  called  attention  to  it  in  his  annual  message  of  that  year. 

196.  Currency  and  banking.  —  Owing  to  the  plentiful  supply 
of  gold  and  its  growing  cheapness  that  metal  now  began  to 
displace  the  few  silver  coins  that  remained  in  circulation  after 
the  act  of  1834^  When  the  smaller  coins  disappeared,  the 
inconvenience  was  so  great  that  Congress  passed  the  law  of 
1853,  debasing  the  fractional  coins  in  order  to  keep  them  in 
circulation  by  decreasing  the  amount  of  pure  silver  in  each. 
Up  to  this  time  the   half  dollars,   quarters,   and  dimes   had 


224      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

contained  exact  fractions  of  the  amount  of  silver  in  a  silver 
dollar;  the  same  causes  that  led  to  the  withdrawal  of  silver 
dollars  from  circulation  removed  also  the  fractional  silver. 
The  act  of  1853  sought  to  remedy  this  by  reducing  the 
amount  of  silver  in  the  fractional  coins  and  making  them 
mere  token  money.  Accordingly  the  smaller  coins  remained 
in  circulation,  wdiile  silver  dollars  practically  disappeared  from 
use. 

After  the  revulsion  of  1837,  and  resulting  depression,  the 
number  of  banks   and   their  ]:)usiness,   as   indicated   by  their 
loans    and   discounts,   remained   fairly   steady   for   a   decade. 
About  1853  another  period  of  expansion  and  speculation  set 
in  which  led  to  a  rapid  extension  of  circulation  from  146  mil- 
lions of  dollars  in  1853  to  215  millions  in  1857,  and  of  loans 
from  409  millions  to  685  millions.     This  expansion  was  one  of 
the  factors  in  the  financial  panic  of  1857.     The  stability  and 
soundness  of  the  banks  differed  greatly  in  different  parts  of 
;   the  country.     In  Massachusetts  and  New  England  generally, 
/  under  the  Suffolk  system,  and  in  New  York  under  the  safety 
I    fund  and  free  banking  or  bond  deposit  systems,  sound  banking 
V^methods  were  gradually  developed,  but  in  the  western  States 
the  losses  by  bad  banking  were  still  very  great  and  extraor- 
dinary looseness  in  legislation   and   administration  prevailed. 
At   one  time  as  many  as  5400  different  kinds  of  specious  or 
counterfeit   notes  were  recorded  as  being  in  circulation.     By 
the  establishment  of  the  national   banking  system   in    1863, 
most  of  these  early  evils  were  l)rought  to  an  end. 

197.  Population  and  immigration.  —  The  population  was 
rapidly  increasing  during  this  period  through  natural  causes, 
doubling  about  once  in  twenty-five  years.  At  the  same  time 
the  country  w^as  receiving  enormous  additions  to  the  labor 
force  through  immigration.  The  potato  famine  in  Ireland  in 
1846,  the  political  disturbances  in  Europe  in  1848,  and  finally 
the  gold  discoveries  in  California  the  same  year,  brought  thou- 
sands of  immigrants  to  this  country.  The  first  great  wave  of 
immigration  took  place  in  the  decade  following  1845,  and  con- 


CURRENCY    AND    BANKING  225 

sisted  largely  of  Irish,  Germans,  English,  and  French.  The 
Irish  settled  for  the  most  part  in  the  eastern  cities,  while  the 
Germans  and  English  took  farms  in  the  central  States.  The 
colonizing  movement  of  the  far  West  was  effected  chiefly  ]:)y 
those  of  native  birth,  who  gave  place  to  the  newcomers  in  the 
eastern  and  central  States,  and  pushed  on  to  the  frontier. 
The  numl^er  of  persons  of  foreign  birth  living  in  the  United 
States  was  2,240,535  in  1850,  and  4,131,866  ten  years  later. 
Such  a  large  infusion  of  foreign  blood  cjuickened  the  movement 
of  the  population  and  developed  the  habit  of  change  and 
enterprise.  The  total  population  of  the  country  grew  from 
17,000.000  in  1840  to  31.000,000  in  1860. 

198.  Industrial  and  economic  changes.  —  The  material 
development  of  this  period,  the  spread  of  the  factory  system 
with  its  attendant  growth  of  a  distinct  wage-earning  class, 
and  the  improvement  in  the  means  of  communication,  had  all 
served  to  break  up  the  old  economic  levels  and  to  introduce 
active  elements  of  change.  Corporations  began  to  take  the 
place  of  individual  enterprises,  and  the  first  beginnings  of 
monopolies  drew  forth  political  and  industrial  protest,  which 
found  expression  in  the  platforms  of  the  labor  party  and  in 
wide-spread  labor  agitation.  During  the  decade  184(>::50  a 
wave  of  socialism  swept  over  the  land,  based  on  the  doctrines 
of  the  French  socialist  Fourier.  "  Phalanxes  "  or  industrial 
groups  were  established  by  the  dozen,  of  which  Brook  Farni^ 
was  one  of  the  most  famous;  and  the  cause  of  labor  was  almost 
sul^merged  in  the  ambitious  attempts  at  general  social  ame- 
lioration. Labor  organization  was  confined  to  the  formation 
of  small  local  unions  until  1850,  when  the  first  national  union, 
that  of  the  printers,  was  established.  By  the  time  of  the  Civil 
War  it  was  estimated  that  twenty-six  trades  had  national 
organizations.  There  was  during  all  this  period  a  steady 
improvement  in  the  condition  of  the  laboring  classes.  Wages 
rose  generally,  and  while  prices  also  increased,  they  did  not  do 
so  in  the  same  proportion.  According  to  the  Aldrich  report, 
if  wages  and  prices  in  1860  be  stated  as  100,  relative  wages  in 
16 


226      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

1840  were  82.5  and  relative  prices  98.5,  indicating  a  great 
relative  improvement  in  the  economic  status  of  the  working- 
■7  man.  In  addition  to  increased  wages,  the  working  classes 
also  secured  an  amelioration  of  various  political,  educational, 
and  legal  conditions  which  had  hitherto  worked  to  their  dis- 
advantage. Thus  imprisonment  for  debt  was  gradually  abol- 
ished after  1823.  It  was  only  in  the  North,  however,  that 
these  industrial  changes  were  taking  place;  in  the  South  the 
blight  of  slavery  had  prevented  all  development  in  industry  and 
had  condemned  agriculture  to  stagnation. 

SUGGESTIVE  TOPICS   AND   QUESTIONS.     CHAPTER   XVI 

1.  Was  the  issue  of  the  Continental  paper  money  during  the  Revolu- 
tion necessary?  Was  it  desirable?  [White,  Money  and  Banking,  115-129; 
Coman,  104-110;  Bolles,  Fin.  Hist.,  I,  Book  1,  chaps.  3,  9,  10;  II,  Book  1, 
chap.  3;  Dewey,  chap.  2;  Sumner,  Amer.  Cur.,  43-60.] 

2.  What  is  the  meaning  and  origin  of  the  expression  "not  worth  a 
continental"?     [White,  Money  and  Banking,  126.] 

3.  Why  did  the  States  issue  paper  money  during  the  years  1781- 
1788?  [Fiske,  Crit.  Per.,  168-186;  McLaughlin,  The  Confed.  and  the 
Const.,  chap.  9.] 

4.  Why  did  not  Rhode  Island  enter  the  I'nion  at  the  same  time  as 
the  other  States?  [Fiske,  Crit.  Period,  345;  Bates,  Rh.  Is.  and  the  Forma- 
tion of  the  Union.] 

5.  What  provision  in  the  Constitution  regulates  the  issue  of  paper 
money  by  the  States?     Why  was  it  inserted? 

6.  Why  was  the  First  United  States  Bank  refused  a  re-charter?  [White, 
Money  and  Banking,  258;  Coman,  154;  Conant,  Mod.  Banks  of  Issue,  292; 
H.  Adams,  Hist,  of  U.  S.  of  America,  V,  208.] 

7.  Why  was  the  Second  United  States  Bank  refused  a  re-charter? 
[White,  Money  and  Banking,  291-314;  also  in  Sound  Currency,  IV,  Xo.  18; 
Conant,  Mod.  Banks  of  Issue,  302-309;  Coman,  193-197;  Knox,  Hist,  of 
Banking,  62-79;  Sumner,  Jackson,  chaps.  6,.  11;  Dewey,  198-203.] 

8.  Why  were  there  no  silver  dollars  coined  between  1806  and  1836? 
[Laughhn,  Hist,  of  Bimet.,  chap.  4;  Sumner,  Amer.  Cur.,  103-113;  Wat- 
son, Hist,  of  Amer.  Coinage,  73-77.] 

9.  Why  was  the  ratio  changed  in  1834?  [Watson,  Hist,  of  Amer. 
Coinage,  chap.  5;  Dewey,  210-212;  as  above.] 

10.  What  were  the  methods  of  a  wild-cat  bank  in  the  fifties?  [White, 
Money  and  Banking,  chap.  12;  Kinley,  Independent  Treasury  of  the  U.  S.] 

11.  If  the  demand  for  money  by  the  settlers  in  a  new  country  is  not 


CURRENCY    AND    BANKING  227 

a  correct  interpretation  of  their  needs,  what  is  it  that  they  want?  [Walker 
Money,  Trade,  and  Industry,  82;  Smith,  Wealth  of  Nations,  Book  4, 
chap.  1;  Bullock,  Mon.  Hist.,  74-78.] 

12.  What  is  the  effect  on  prices  of  a  large  addition  to  the  money 
supply  of  a  country?     [Any  text  on  economics;  see  Index,  "Money."] 

13.  Describe  the  discovery  of  gold  in  California  in  1848,  and  its  effects. 
[Johnson,  Great  Events,  XVII,  188-197;  Bancroft,  Hist,  of  Pac.  States, 
XVIII;  Stillman,  Seeking  the  Golden  Fleece;  Taylor,  El  Dorado.] 

14.  What  caused  the  panic  of  1857?  [Coman,  242-243;  Sumner, 
Amer.  Cur.,  169-187;  Wright,  Ind.  Depressions,  56-60;  Dewey,  259-264; 
Burton,  Crises  and  Depressions,  282-286.J 

15.  Describe  the  social  doctrines  of  the  French  socialist  Fourier. 
How  far  were  they  accepted  in  America?  [A.  Brisbane,  Social  Destiny  of 
Man;  Kirkup,  Hist,  of  Sociahsm,  31-40;  Ely,  French  and  German  Social- 
ism, chap.  5;  Bliss,  Encycl.  of  Soc.  Ref.,  art.  Fourier.] 

16.  Describe  Brook  Farm  as  a  socialistic  experiment.  Why  did  it 
not  succeed?  [Noyes,  Hist,  of  Amer.  Socialisms,  chap.  2;  Sotheran, 
148-153;  Codman,  Brook  Farm;  Bliss,  Encycl.  of  Soc.  Ref.,  art.  Brook 
Farm.] 

17.  Who  was  Dorothea  Dix  and  what  were  her  public  services? 
[Encycl.] 

18.  Describe  the  experiences  of  an  immigrant  to  the  United  States 
about  1840-60. 

19.  What  revolutionary  disturbances  were  there  in  Europe  about 
1848?     [Fisher,  Univ.  Hist.,  564-570.] 

SELECTED   REFERENCES.     CHAPTER  XVI 

*Coman:  Industrial  History  of  the  United  States,  193-201. 

*McDonald:  Jacksonian  Democracy,  chaps.  7,  13,  16. 

*Noyes:  History  of  American  Socialisms. 

*Sotheran:  Horace  Greeley  and  other  Pioneers  of  American  Socialism. 

*W^atson:  History  of  American  Coinage,  chaps.  5-7. 

**White:  Money  and  Banking,  book  1,  chap.  3;  book  3,  chaps.  6-13. 

x\ldrich:    Wholesale  Prices,  etc.     Part  1,  11-16. 

Eighth  Census,  vol.  on  Population. 

Dewey:  Financial  History  of  the  United  States,  chap.  10. 

Eighty  Years'  Progress,  435-455. 

Mayo-Smith:  Emigration  and  Immigration,  chap.  3. 
Schurz:  Henry  Clay,  II,  113-127. 


CHAPTER   XVII 
PUBLIC   LANDS  AND  AGRICULTURE     (1808-1840) 

199.  Importance  of  the  public  lands.  —  It  is  almost  impos- 
sible to  exaggerate  the  influence  which  the  vast  western  expanse 
of  free  land  has  had  upon  the  economic  history  of  the  United 
States.  In  the  later  days  of  the  Confederation  and  the  early 
days  of  the  Republic  it  bound  together  by  economic  interests 
the  States  at  a  time  when  they  would  otherwise  have  drifted 
apart.  Later  it  afforded  an  outlet  for  a  growing  population, 
wdiich,  instead  of  becoming  denser,  has  spent  its  force  in  taking 
up  new  territory.  The  problem  of  over-population  —  that 
bogy  of  the  early  nineteenth  centur}^  in  England  —  had  no 
meaning  in  a  country  where  an  increase  of  hands  was  the 
greatest  need.  Unemployment,  the  standard  of  living,  and 
the  rate  of  wages,  were  all  solved  by  a  recourse  to  the  free  land 
of  the  West,  while  the  problem  of  immigration  was  mainl}^ 
that  of  inducing  foreigners  to  come  to  our  shores.  This  abun- 
dance of  land  has  greatly  simplified  economic  and  social  prol)- 
lems,  and  has  acted  as  a  safety-valve  in  times  of  depression 
and  panic. 

200.  Disposal  of  the  land  for  settlement.  —  The  early  policy 
of  the  government,  of  land  sales  for  the  sake  of  revenue,  grad- 
ually gave  way  to  the  second,  and  what  has  proved  to  be  the 
permanent,   policy  respecting  the  piiblic_Jands.     This  is  the 

/system  of  land  grants  for  actual  settlement  in  small  lots  suit- 
able for  cultivation.     By  the  act  of  April,  1820,  sale  for  credit 
/was  abandoned,  and  the  price  reduced  to  $1.25  an  acre,  while 
^'  the  minimum  tract  to  be  sold  to  one  individual  was  reduced  to 
eighty  acres.     For  the  next  ten  years  the  sales  of  public  land 
were    very   steady,    averaging   al)out    1,000,000   acres   yearly. 

228 


PUBLIC    LANDS   AND    AGRICULTURE  229 

The  introduction  of  the  steamboat  upon  western  waters,  the 
extension  of  cotton  culture  through  the  Southw^est,  the  greater 
demand  for  agricultural  produce  due  to  the  growth  in  popula- 
tion, all  led  to  a  steady  demand  for  land  for  actual  cultivation 
and  settlement.  Nevertheless,  in  December,  1827,  the  Secre- 
tary of  the  Treasury  reported  that  while  more  than  261,000,000 
acres  of  land  had  been  added  to  the  public  domain,  since  the 
organization  of  the  government  but  19,000,000  acres  had  been 


Horse  Rake,  1818 
"After  the  crop  is  cut,  the  swath  is  collected  hy  the  hand,  and  tied 
into  sheaves;  a  small  quantity  of  stalks  still  remain  scattered  over 
the  surface,  these  are  commonly  collected  by  the  hand-rake.  To 
facilitate  the  latter  part  of  the  process,  a  horse  rake  has  been  recently 
invented."  —  Flint's  Letters  from  America,  1818. 

sold  to  individuals.  At  that  rate  it  was  estimated  that  more 
than  five  centuries  must  elapse  before  the  public  lands  would 
pass  into  the  hands  of  private  owners.  During  the  years  from 
1825  to  1832  many  schemes  of  a  most  questionable  character 
were  introduced  in  Congress,  for  disposing  of  the  lands  by  sale 
or  gift,  for  reducing  the  price,  or  for  handing  over  the  public 
lands  to  the  States  for  them  to  dispose  of. 

201.  Speculation  in  western  lands.  —  The  next  few  years 
saw  an  outburst  of  speculative  activity  which  has  scarcely 
been  equaled  since  in  the  United  States.  This  was  largely 
owing  to  the  great  increase  in  land  values,  the  inflated  condi- 
tion of  the  currency,  and  the  loose  banking  methods  then  pre- 
vailing. Western  lands  had  been  steadily  appreciating  in 
value  for  some  years,  and  as  credit  and  money  became  easier 
under  the  speculative  fever  of  the  time,  they  seemed  a  favorable 


230      ECONOMIC   HISTORY    OF    THE    UNITED   STATES 


object  of  investment  to  those  who  were  seeking  an  easy 
and  rapid  increase  of  wealth.  Paper  villages  were  laid  out, 
lands  were  sold   at  greatly  enhanced   prices,  often  fifty  times 

their  original  cost,  and 
speculation  was  fanned  to 
a  fever  heat.  The  sales 
of  public  lands  swelled 
rapidly,  amounting  to 
3,856,278  acres  for  the 
year  1833,  and  to  the 
enormous  figure  of  20,- 
074,871  acres  for  1836. 
This  exceeded  all  that 
had  been  sold  before, 
since  the  adoption  of  the 
Constitution.  Nor  was 
the  speculation  confined 
to  western  lands;  owing 
to  the  extension  of  cotton 
culture  due  to  the  in- 
creasing demand  for,  and 
the  consequent  advance 
in  the  price  of,  cotton  — 
from  a  maximum  of  13^  cents  a  pound  in  1833  to  20  cents  in 
1835  —  the  value  of  southern  plantations  and  city  real  estate 
rose  enormously.  The  coal  lands  of  Pennsylvania  and  the 
manufacturing  cities  of  the  East  felt  a  similar  impetus.  Thus 
the  assessed  value  of  real  estate  in  New  York  City  rose  from 
$143,732,425  in  1835  to  $233,742,303  in  1836,  and  in  Mobile 
from  $4,000,000  in  1834  to  $27,000,000  in  1837.  After  the 
panic  of  1837  these  prices  fell  even  more  rapidly. 

202.  Extension  of  farm  area.  —  The  settlement  of  the  fertile 
country  about  the  Great  Lakes  proceeded  rapidly  after  the 
construction  of  the  Erie  and  other  canals  had  provided  an 
outlet  to  the  Atlantic  ports  for  western  produce.  Between 
1820  and  1840  the  population  of  Ohio  increased  from  581,295 


Cradle  Scythe,  1818 
In  most  parts  of  America  the  crops  were 
cut  down  at  this  time  by  the  cradle  scythe. 
This  was  a  frame  of  wood  with  a  row  of 
long  curved  ribs  projecting  above  and 
parallel  to  a  broad  scythe-blade,  for  cut- 
ting grains  and  laying  them  in  a  straight 
swath.  The  cradle  acted  as  a  gathering 
rake,  and  deposited  the  grain  in  an  even  pile 
with  every  swing  of  the  scythe. 


PUBLIC    LANDS    AND    AGRICULTURE  231 

to  1,519,467;  that  of  Indiana  from  147,178  to  685,866;  of 
Illinois,  from  55,162  to  476,183;  and  of  Michigan,  from  8,765 
to  212,267.  With  the  extension  of  cultivated  area  the  pro-- 
duct  ion  of  the  cereals  increased  enormously;  most  of  it,  how- 
ever, found  a  market  in  the  growing  Southwest,  and  the 
lake  grain  trade  did  not  begin  to  expand  until  the  end  of 
this  period.     As  late  as  1835  Ohio  w^as  the  only  State  in  the 


Plow  and  Neck  Yoke,  1832 
"  The  plow  is  different  in  its  construction  from  that  used  in  Germany, 
and  the  oxen  are  attached  to  it  by  a  very  peculiar  yoke,  which  consists  of 
a  long,  thick,  crooked  piece  of  wood,  which  is  laid  horizontally  over  the 
necks  of  the  two  oxen,  with  two  bows  underneath,  through  which  the 
heads  of  the  animals  are  put."  Travels  in  the  Interior  of  North  America, 
by  Maximilian,  Prince  of  Wied,  1832. 

West  exporting  grain  direct  to  the  Atlantic  Coast.  The  first 
shipments  of  grain  from  Chicago  consisted  of  78  bushels  of 
wheat  in  1838,  while  the  first  shipment  from  Wisconsin  was 
not  made  until  three  years  later.  In  1840,  when  this  crop 
first  appeared  in  the  census,  the  production  of  Indian  corn 
amounted  to  377,531,875  bushels,  and  of  wheat  to  84,823,272 
bushels.     The  population  of   the  southern  slave  States  had 


232      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

also  increased,  although  not  quite  so  rapidly  as  the  West, 
from  1,200,484  in  1820  to  2,659,085.  in  1840;  the  production 
of  cotton  in  the  latter  3^ear  was  790,479,275  pounds,  or  six 
times  the  product  of  1820.  In  New  England  attention  began 
for  the  first  time  on  a  large  scale  to  be  directed  to  the  culti- 
vation of  fruit,  which  up  to  that  time  had  been  very  poor,^ 
and  to  market  gardening;  by  1840  the  capital  invested  in 
these  branches  was  almost  $3,000,000,  and  the  annual  returns 
somewhat  more. 

203.  Improvements  in  farm  implements.  —  Of  far-reaching 
influence  on  the  extension  of  cereal  production  throughout  the 
flat  prairie  regions  of  the  central  West  w^as  the  invention  of 
various  mechanical  devices  for  plowing,  cultivating,  mowing, 
reaping,  and  threshing  the  crops.  The  cast-iron  plow  was  in 
general  use  by  1825.  During  the  next  decade  the  use  of  thresh- 
ing machines  spread  wdth  great  rapidity,  and  by  1840  compara- 
tively little  grain  was  threshed  in  any  other  way.  The  first 
patent  for  a  mowdng  machine  was  granted  to  William  Manning, 
of  New  Jersey,  in  1831,  and  for  a  reaping  machine  to  Obed 
Hussey,  of  Baltimore,  in  1833,  which  cut  grain  as  fast  as  eight 
persons  could  bind  it.  In  1834  a  patent  was  issued  to  Cyrus 
H.  McCormick  for  an  improved  reaping  machine  for  cutting 
grains  of  all  kinds.  Only  limited  success  attended  the  early 
introduction  of  these  machines,  and  it  was  not  until  after  1840 
that  they  exerted  their  transforming  influence  on  western 
agriculture.  Other  labor-saving  implements  may  be  men- 
tioned here,  though  the  beginnings  of  some  of  them  date  back 

1  Mrs.  Trollope  in  her  Domestic  Manners  of  the  Americans,  writes  as 
follows  of  her  experiences  in  Ohio :  "  All  the  fruit  I  saw  exposed  for  sale 
in  Cincinnati  was  most  miserable.  I  passed  two  summers  there,  hut 
never  tasted  a  peach  worth  eating.  Of  apricots  and  nectarines  I 
saw  none;  strawberries  very  small,  raspberries  much  worse;  goose- 
berries very  few  and  quite  uneatable;  currants  about  half  the  size  of 
ours,  and  about  double  the  price;  grapes  too  sour  for  tarts;  apples 
abundant,  but  very  indifferent,  none  that  would  be  thought  good 
enough  for  an  English  table;  pears,  cherries,  and  plums,  most  miserably 


PUBLIC    LANDS    AND    AGRICULTURE 


233 


to  the  previous  century;  such  were  the  cultivators,  horse-hoes, 
grubbers,  drills,  and  seed -sowers. 


First  McCormick  Reaper,  1831 
The  first  reaper  built  liy  Cyrus  H.  McCormick,  of  Virginia,  was 
made  at  a  blacksmith's  shop  in  the  Shenandoah  valley.  These 
reapers  enabled  one  man  with  a  team  of  horses  to  cut  as  much  grain 
as  twenty  men  with  cradle  scythes.  McCormick  did  not  take  out 
his  first  patent  until  1834. 


204.  Live  stock.  —  The  cattle  industry  of  the  United  States 
has  always  flourished  on  the  frontier,  and  durino;  this  period 
made  steady  progress  in  tJie_WesL^  The  first  fat  cattle  that  ever 
crossed  the  Alleghanies  were  driven  from  Ohio  to  Baltimore  in 
the  spring  of  1805.  This  proved  the  beginning  of  a  profitable 
trade,  and,  until  the  railroads  began  to  transport  them  directly 
to  the  eastern  market,  western  cattle  were  fattened  on  corn  in 
Ohio  during  the  winter  months  and  then  driven  eastward  in 
the  spring.  About  1832-36  a  general  interest  in  the  improve- 
ment of  live  stock  began  to-be  manifested  by  farmers,  largely 


234      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

as  a  result  of  the  exhibitions  at  county  fairs  which  had  begun 
about  1810,  but  were  now  revived  and  improved.  Durhams, 
short-horns,  Herefords,  Devons,  and  other  improved  breeds 
were  imported  and  crossed  with  the  common  cattle  of  the 
United  States,  resulting  in  a  great  improvement  in  size,  early 
maturity,  and  quality  of  beef. 

The  first  importation  of  merino  sheep  had  been  made  in 
1793,  but  it  was  not  until  the  Embargo  forced  the  people  to 
produce  their  own  clothing  that  general  attention  was  directed 
to  the  raising  of  fine-wool  sheep.  Societies  were  formed  in 
Kentucky  and  Ohio  to  improve  the  breeds  by  the  importation 
of  pure  merinos,  southdowns,  and  other  blooded  stock,  and 
great  improvements  were  effected  in  breeding  both  for  mutton 
and  for  wool.  These  States,  with  western  New  York,  remained 
the  seat  of  the  industry  until  after  the  Civil  War.  Large 
numbers  of  swine  were  also  raised,  especially  in  Ohio,  Ken- 
tucky, and  Tennessee;  Cincinnati  was  the  center  of  the  meat- 
packing industry  until  displaced  some  years  later,  in  1861,  by 
Chicago.  The  following  table  shows  the  number  of  live  stock 
in  the  United  States  in  1840: 


Neat  Cattle 

Sheep 

Swine 

14,971,585 

19,311,374 

26,301,293 

205.  Character  of  agriculture.  —  American  farming  was 
still  characterized  by  the  wasteful  and  exhausting  methods  of 
cropping  without  fertilizing  that  prevailed  in  colonial  times. 
This  was  caused  partly  by  the  fertility  of  the  soil  and  the 
abundance  of  free  land,  and  partly  by  the  unsettled  nature  of 
farming  and  the  unwillingness  to  sink  capital  in  improvements. 
"  It  seldom  happens,"  wrote  Tocqueville  in  1840,  ''  that  an 
American  farmer  settles  for  good  upon  the  land  which  he 
occupies;  especially  in  districts  of  the  far  West  he  brings  land 
into  tillage  in  order  to  sell  it  again  and  not  to  farm  it."     The 


PUBLIC    LANDS    AND   AGRICULTURE 


235 


same  thing  was  remarked  by  another  traveler*:  "There  is 
scarcely  any  such  thing  in  New  England  and  New  York  as 
local  attachment.  .  .  . 
Speaking  generally,  every 
farm,  from  East  port  in 
Maine  to  Buffalo  on  Lake 
Erie,  is  for  sale.  The 
owner  has  already  fixed  a 
price  in  his  mind  for 
which  he  would  be  will- 
ing, and  even  hopes  to 
sell,  believing  that  with 
the  same  money  he  could 
do  better  for  himself  and 
his  family  by  going  still 
farther  West.  Thus,  to 
lay  out  money  in  improve- 
ments is  actually  to  bury 
what  he  does  not  hope  to 
be  able  to  get  out  of  his 
farm  again,  when  the  op- 
portunity for  selling  pre- 
sents itself."  So  long  as 
land  was  held  only  as  a 
speculation,  in  order  to 
sell  again,  farming  could 
not  be  brought  to  a  very 
high  state  of  develop- 
ment. American  agriculture  has  suffered  from  this  fact  down 
to  the  present  time. 


|^^:\>' 

!■* 

afS^^Sr^T'i.^^KIt^^^Ri^Si^^H 

Mowing  by  Scythe 
The  scythe  was  a  great  advance  over 
the  sickle  and  was  universally  used  in 
the  United  States  until  the  invention 
of  the  reaper.  It  is  still  in  common 
use  on  small  farms  or  on  rough  ground. 
The  common  hay  scythe  consists  of  a 
slightly  curved  broad  blade  mounted 
on  a  bent  wood  bar  or  snath  to  which 
two  handles  are  attached.  The  mowing 
is  done  with  an  easy  swing,  which  lays 
the  hay  in  a  continuous  though  not 
very  even  swath. 


SUGGESTIVE  TOPICS   AND   QUESTIONS.     CHAP.   XVII 

1.  What  were  the  methods  and  implements  in  use  before  the  intro- 
duction of  the  cast-iron  plow,  the  reaper,  mower,  thresher,  and  other 
improved  implements  mentioned?     [Eighty  Years  Progress;  Eighth  Census 


J,  F.  W.  Johnston,  Notes  on  North  America,  p.  163. 


236      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

(1860),  vol.  Agric,  Intro.,  xi-xxiv;  Twelfth  Census  (1900),  X,  352-364; 
Holmes,  Progress  of  Agric.   in  U.S.] 

2.  Was  there  any  connection  between  the  different  tariffs  and  the 
sheep-raising  industry?  Was  there  a  duty  on  cattle?  Why  on  one  and 
not  on  the  other?  [Taussig,  Tar.  Hist.,  239,  257,  292,  330;  Lewis,  Our 
Sheep  and  the  Tariff;  Grosvenor,  Does  Protection  Protect?] 

3.  Describe  the  early  introduction  of  improved  merino  sheep  into 
this  country.  Is  sheep-raising  successful  in  the  United  States  to-day? 
[Eighth  Census  (1860),  vol.  Manuf.,  26-32;  Coman,  182.] 

4.  Would  you  call  a  period  of  advancing  prices  and  speculative 
activity,  such  as  existed  in  1834-7,  "good  times"?     [Dewey,  224-231.] 

5.  What  proportion  of  your  class-mates  to-day  live  in  the  same  State 
or  county  in  which  their  parents  were  born?  What  does  this  seem  to 
indicate  as  to  local  attachment?  Has  it  any  effect  on  good  government, 
in  our  cities  or  elsewhere? 

6.  What  were  some  of  the  schemes  mentioned  in  sect.  200  for  disposing 
of  the  public  lands? 

7.  Was  the  wish  to  own  a  home  or  the  hope  of  a  rise  in  the  value  of 
the  land,  the  main  reason,  in  your  opinion,  for  the  taking  up  of  the  western 
lands? 

8.  What  was  the  Yazoo  Land  Company,  and  what  were  the  scandals 
connected  therewith?  [Haskins,  Yazoo  Land  Co.;  Roosevelt,  Winning 
of  West,  IV,  188-193.] 

9.  In  what  States  were  the  land  sales  greatest?  What  was  the  growth 
of  population  during  the  decade  1830-40  in  these  States?  Does  this 
show  anything  as  to  whether  the  lands  were  bought  for  actual  settle- 
ment? 

10.  What  effect  did  the  sale  of  land  to  speculators  have  upon  its 
actual  settlement?     [Kettel,  in  Hunt's  Merch.  Mag.,  XI,  112.] 

11.  Do  the  governments  of  other  countries  own  land?  Would  it 
have  been  l)etter  for  the  United  States  to  have  retained  the  ownership 
of  most  or  all  of  the  land,  instead  of  giving  it  away?  [H.  C.  Adams,  Sci. 
of  Fin.,  247-254;  Bastable,  Pub.  Fin.,  169-190;  Marshall,  Princ.  of  Econ., 
500,  n.  2;  Bullock,  Introduction,  16;  Hart,  in  Quart.  Journ.  Econ.,  I, 
169.] 

12.  What  is  the  policy  of  Australia  in  disposing  of  her  pul)lic  domain? 
[Lloyd,  Newest  England,  chaps.  7-9.] 

13.  Are  the  statements  made  in  sect.  205  true  to-day  to  your  knowl- 
edge? 

14.  What  did  Henry  George  believe  as  to  the  justice  of  private  prop- 
erty in  land?  What  is  the  socialists'  position?  [George,  Progress  and 
Poverty,  Book  7;  Simonson,  A  Plain  examination  of  Socialism,  98;  de 
Laveleye,  Socialism  of  To-day,  chap.  11;  Gide,  Pol.  Econ.,  455,  593.] 


PUBLIC    LANDS    AND    AGRICULTURE  237 


SELECTED   REFERENCES.     CHAPTER   XVII 

*Adams,  H.  C:  Science  of  Finance,  255-263. 

Eighth  Census  (1860),  vol.  on  Agriculture,  Intro. 

*Flint:  One  Hundred  Years  of  American  Agriculture  in  Eighty  Years 

Progress,  27;  also  in  An.  Rep.  U.  S.  Dept.  of  Agric,  7,97;^,  p.  280; 

and  in  First  An.  Rep.  Mass.  Bd.  of  Agric,  1854. 
**Hart:  The  Disposition  of  Our  Pubhc  Lands,  in  Quarterly  Journal  of 

Economics,  I,  169-183;   also  in   Practical  Essays  on  American  (!ov- 

ernment,  233-258. 
*McMaster:  History  of  the  People  of  the   United  States,  II,  476-482; 

III,  89-146;  V,  170.] 
**Sato:  History  of  Land  Que.stion  of  the  United  States,  1-160,  38.5-409. 

Colton:  Life,  Correspondence,  and  Speeches  of  Henry  Clay,  I,  chap.  20; 
VI,  56-85. 

Donaldson:  The  Public  Domain,  chaps.  7,  8,  10,  13. 

The  Public  Lands  of  the  United  States,  in  Hunt's  Merchant  Maga- 
zine, XI,  107-121. 

McDonald:  Jacksonian  Democracy,  chap.   16. 

Tocqueville:  Democracy  in  America,  II,  book  2,  chaps.  18-20;  book  3, 
chaps.  6,  7;  also  in  Hart's  American  History  told  by  Contempo- 
raries, III,  524. 

Woolsey:  First  Century  of  the  Republic,  180. 


y 


CHAPTER   XVIII 

THE  APPLICATION   OF  MACHINERY  TO  AGRICULTURE 
( I 840-1 860) 

206.  Industrial  expansion.  —  The  period  upon  which  we  are 
now  entering  was  one  of  great  material  prosperity  and  expan- 
sion in  all  lines  of  industry.  This  prosperity  was  the  result 
of  a  combination  of  diverse  causes,  among  which  may  be 
enumerated  the  application  of  machinery  to  agriculture,  the 
rapid  development  of  the  West,  the  discoyerv  of^old  in  Cali- 
fornia, the  extension  of  railroads,  faniine_and  wars  abroad,  the 
repeal  of  the  English  corn  laws,  the  expansion  of  our  foreign 
commerce,  an3"Theenornious_gxQivth  of  manufactures.  As  a 
result  of  the  Irish  potato  famine  in  1846,  the  revolutionary 
disturbances  in  Europe  in  1848,  and  the  discovery  of  gold  in 
California  in  the  same  year,  the  number  of  immigrants  into 
the  United  States  increased  by  leaps  and  bounds:  from  80,289 
in  1841  the  annual  arrivals  jumped  to  234,968  in  1847,  and 
427,833  in  1854,  a  figure  that  was  equaled  only  once  in  the  next 
twenty-five  years.  The  increase  of  railroad  mileage  from 
2818  in  1840  to  30,626  in  1860  was  not  only  in  itself  a  wonder- 
ful achievement,  but  was  also  of  enormous  importance  in 
opening  up  the  western  country.  The  repeal  of  the  English 
corn  laws  in  1846  opened  a  market  for  our  surplus  grain,  while 
the  expanding  British  manufactures,  as  well  as  those  of  our 
own  eastern  States,  absorbed  increasing  amounts  of  cotton 
and  other  raw  materials.  These  factors,  together  with  the 
lowering  of  the  tariff  in  1846,  led  to  an  immense  increase  in  our 
foreign  commerce,  which  trebled  between  1830  and  1860. 

207.  The  thresher  and  reaper.  —  Far-reaching  as  were  these 
changes  on  the  side  of.  demand,  the  improvements  that  were 

238 


APPLICATION    OF    MACHINERY    TO    AGRICULTURE     239 

made  during  this  period  in  producing  food  and  raw  materials 
were  still  more  revolutionary.  The  threshing  machine  had 
come  into  general  use  by  ^840,  but  improvements  continued 
to  be  invented:  up  to  186Q_the  number  of  patents  —  354  — 
granted  for  threshing  machines  was  larger  than  had  been 
issued  for  any  other  instrument  except  the  plow  and  water- 
wheel,  and  perhaps  grain  harvesters  and  corn-planters.  At 
first,  the  machine  merely  threshed,  but  about  1850  separators 
were  added,  which  separated  the  grain  from  the  chaff  and 
straw.  By  1860  steam-threshers  were  introduced,  but  horse 
power  was  still  generally  used. 

During  the  first  third,  or  perhaps  half,  of  this  century,  hay 
and  grain  were  cut  with  a  scythe  (or  sickle)  and  raked  with  a 
hand-rake.  Using  these  tools  a  man  could  cut  and  rake  an 
acre  a  day,  w^orking  much  harder  than  the  average  farmer  of 
to-day.  In  fact,  until  1850  nearly  all  the  operations  of  agri- 
culture, except  that  of  threshing  the  grain,  were  performed  by 
manual  labor.  The  prototype  of  the  revolving  hay-rake  was 
invented  in  1824  and  perfected  about  1856,  and  in  1833  the 
reaping  machine  was  first  patented.  The  common  use  of  the 
practicable  reaper  and  mower,  however,  dates  from  about 
1850.  It  was  given  a  great  impetus  by  the  success  of  American 
machines  at  the  World's  Fair  in  London  in  1851  and  at  an 
exhibition  near  Paris  four  years  later.  ''  The  triumph  of  the 
American  reapers,"  said  the  official  report  at  London,  ''  worked 
a  new  era  in  agriculture."  At  the  Paris  exhibition  a  trial  of 
mowing,  reaping,  and  threshing  machines  was  made,  and  of 
the  results  a  correspondent  of  the  New  York  Tribune  wrote: 
''  Six  men  were  set  to  threshing  with  flails  at  the  same  moment 
that  the  different  machines  commenced  operations,  and  the 
following  were  the  results  of  half  an  hour's  work: 

"Six  threshers  with  flails    60  liters  of  wheat 

Belgium  thresher 150  liters  of  wheat 

French  thresher 250  hters  of  wheat 

Enghsh  thresher    410  liters  of  wheat 

American  thresher .v  740  liters  of  wheat" 


240      ECONOMIC   HISTORY    OF    THE    UNITED   STATES 


Improvement  of  the  Wagon.    I 
The  plain  springless  box  wagon  was  in- 
troduced in  1810. 


In  the  trial  of  reapers  the  following  was  the  result  in  a  field 
of  oats:  an  Algerian  machine  cut  an  acre  in  72  minutes;  an 
English  machine  in  66  minutes;  and  an  American  in  22  minutes. 
208.  Other  improvements.  —  The  application  of  machinery 
to  the  work  of  harvesting  marked  an  epoch  in  American  agri- 
culture; there  was  now  no 
practical  limit  to  production 
through  inability  to  gather 
the  crop.  But  the  use  of 
machines  in  harvesting  was 
supplemented,  though  in  a 
lesser  degree,  by  their  appli- 
cation to  the  cultivation 
and  tillage  of  the  crop,  par- 
ticularly of  Indian  corn.  A 
variety  of  cultivators,  horse- 
hoes,  seed-drills,  and  similar  implements  enabled  the  farmer  to 
substitute  animal  power  for  hand  culture.  In  a  new  country 
like  the  United  States,  where  labor  was  still  scarce  and  high, 
labor-saving  machines  were  indispensable.  The  chief  char- 
acteristics of  the  American 
machines  were,  as  they  still 
are,  lightness,  simplicity,  and 
cheapness,  in  all  of  which 
qualities  they  far  excelled 
those  of  England  and  Europe. 
By  1860  the  total  value  of 
agricultural  i  m  pi  e  m  e  n  t  s 
manufactured  in  the  United 
States  was  $17,802,514. 

During  this  period,  too,  commercial  fertilizers  were  intro- 
duced into  the  United  States,  and  the  application  of  chemistry 
to  agriculture,  first  reduced  to  a  science  by  Liebig,  was  put  in 
practice. 

But  great  as  was  the  progress  in  cultivating,  harvesting, 
and  cleaning  the  grain,  it  was  still  greater  in  grain  transporta- 


Impuovement  of  the  A\agon.    II 
In  1820  the  seat  was  put  upon  a  spring. 


APPLICATION    OF    MACHINERY    TO    AGRICULTURE     241 


tion.     The  most  remarkable  progress  was  made  during  this 

period  by  the  western  States  (Ohio,  Indiana,  Illinois,  Michigan, 

and  Wisconsin).     In  these 

five   States   between    1850 

and    1860   the    number   of 

miles     of     railroad     grew 

from    1275    to    9616;    the 

production   of   corn,   oats, 

and  cattle    increased  over 

50  per  cent.,  and  of  wheat 

and      potatoes      100      per       Improvement  of  the  Wagox.    Ill 

cent.      At    the    same    time     Thethoroughbrace  was  placed  under  t ho 

the     cash      value      of      the     hody  of  the  wagon  in  1825. 

farms  in  these  States  almost  trebled.  The  rivers  and  canals 
were  quite  inadequate  to  transport  this  increased  produc- 
tion, which  was  made  possible  only  by  the  rapid  extension 
of  railroads. 

209.   Benefits  of  farm  machinery.  —  The  saving  effected  l)y 
the  use  of  these  improved  implements  was  estimated  in  the 

census  of  1860  as  equal  to 
more  than  one  half  the  former 
cost  of  working.  "  By  the 
improved  plow,  labor  equiva- 
lent to  that  of  one  horse  in 
three  is  saved.  By  means  of 
drills  two  bushels  of  seed  will 
go  as  i^T  as  three  bushels 
scattered  broadcast,  while  the 
yield  is  increased  six  to  eight 
bushels  per  acre;  the  plants 
come  up  in  rows  and  may  be  tended  by  horse-hoes.  .  .  .  The 
reaping  machine  is  a  saving  of  more  than  one  third  the  labor 
when  it  cuts  and  rakes.  .  .  .  The  threshing  machine  is  a  saving 
of  two  thirds  on  the  old  hand-flail  mode.  .  .  .  The  saving  in 
the  labor  of  handling  hay  in  the  field  and  barn  by  means  of 
horse-rakes  and  horse-hayforks  is  equal  to  one  half."  But 
17 


Improvemext  of  the  Wagpn.  IV 
In  1825  the  elliptical  spring  was  in- 
troduced over  the  two  axles. 


242      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

the  real  gain  to  agriculture  by  the  use  of  these  machines  cannot 
be  measured  by  merely  noting  the  increased  area  that  can  be 
cultivated  by  a  given  labor  force,  or  the  saving  in  labor  cost. 
It  consists  rather  in  the  saving  of  time,  which  permits  a  large 
crop  to  be  harvested  at  the  moment  of  maturity,  without  loss 
by  delay  or  exposure.  The  whole  labor  force  of  the  United 
States  in  1860  would  probably  have  been  insufficient  to  have 
harvested  in  season  the  crops  of  that  year  by  the  methods  of  a 
generation  previous. 

The  expansion  that  was  taking  place  in  agriculture  during 
this  period  can  best  be  seen  in  the  following  table: 

Agricultural  Expansion,    1840-1860 

Principal  Agricultural   Products   (in   millions) 


Product 


Improved  farm  land,  acres. 

Corn,  bushels 

Wheat,  bushels 

Oats,  bushels 

Rye,  bushels 

Buckwheat,  bushels 

Barley,  bushels 

Potatoes,  bushels 

Hay,  tons 

Butter,  lbs 

Cheese,  lbs. 

Wool,  lbs 

Cotton,  bales  of  400  lbs.. . . 

Tobacco,  lbs 

Rice,  lbs 


1840 


377.5 

84.8 

123.0 

18.6 

7.3 

4.1 

104.2 

10.2 


35.8 

1.5 

219.1 

80.8 


1850 


113.0 
592.0 
100.4 
146.5 

14.1 

8.9 

5.1 

104.0 

13.8 
313.3 
105.5 

52.5 

2.4 

199.7 

215.3 


1860 


163.1 

838.8 

173.1 

172.6 

21.1 

17.5 

15.8 

153.2 

19.0 

459.6 

103.6 

60.2 

5.3 

434.2 

187.1 


210.  Live  stock.  —  There  was  no  improvement  in  live  stock 
during  this  period  such  as  had  marked  the  previous  one. 
Perhaps  the  most  important  event  was  the  importation  into 
Ohio  of  the  Percheron  stallion  Louis  Napoleon,  from  which 
dates  a  great  improvement  in  the  draft  horse.     Before  this  the 


APPLICATION    OF    MACHINERY    TO    AGRICULTURE     243    - 


most  prized  animals  as  beasts  of  burden,  in  addition  to  mules, 
were  the  Conestoga  horses,  which  were  early  used  to  draw  the 
Philadelphia-Pittsburg  stage-coach.  Some  attention  had  been 
given  to  breeding  trotting 
horses  and  several  importa- 
tions made;  a  great  sensa- 
tion had  been  occasioned 
in  1816  when  ''  Yankey  '' 
trotted  a  mile  under  the 
saddle  at  the  Harlem  race 
course  in  New  York  City  in 
2.59,  but  religious  sentiment  Improvement  of  the  Hog.     I 

in    the    North   wis    lo-nirmt     ^^^  ^,°"!,^,^^"  P"^  ^^oods  hog,  which 
m    ine    iNOnn   was    agamst     ranged  wild  in  the  woods  at  all  seasons, 

speed     tests.      Trotting    did     developed  fleetness  of  foot,  coarse,  large 

i    1  1  bones,  and  a  thick,  hard  coat, 

not  become  a  popular  pas- 
time until    after   the    introduction   of   macadam   pavements. 
Up  to  1840  the  buggy  was  practically  unknown,  the  common 
mode  of  travel  being  on  horseback. 

The  number  of  sheep  remained  almost  at  a  standstill,  while 
the  increase  in  neat  cattle  and  swine  did  not  keep  pace  with  the 

growth  of  the  popula- 
tion. All  of  these  ani- 
mals were  raised  chiefly 
for  slaughtering.  While 
the  pork-packing  industry 
did  not  assume  large  pro- 
portions until  the  decade 
of  the  Civil  War,  in  1860 
over  400,000  hogs  were 
slaughtered  annually  at 
Cincinnati  and  230,000 
at  Chicago.     An  improve- 


Improvement  of  the  Hog.   II 
The  Western  beech  nut  hog  shows  an  im- 
provement, but  was   coarse,  long-legged, 
large-boned,  slab-sided,  and  flab-eared. 


ment  was  introduced  into  the  dairying  business  during  this 
period,  which  in  time  worked  a  revolution  in  that  branch 
of  farm  work.  Up  to  1850  all  the  butter  and  cheese  was 
made  on  the  farm,  but  in  the  next  year  the  associated  system 


244      ECONOMIC    HISTORY    OF    THE    UNITED   STATES 

of  dairying  known  as  the  American  system  was  inaugurated 
by  the  invention  of  the  cheese-factory,  of  w^hich  twenty-one 
were  built  by  1861.  Its  complete  development,  however,  be- 
longs to  the  next  period. 


Improvement  of  the  Hog.    Ill 
The  improved  Suffolk  shows  the  desirable  qualities 
of  a  hog  —  small  bones,  short  legs,  round  barrel, 
thin  coat,  ready  fattening  qualities,  and  sluggish- 
ness. 


The  following  table  shows  the  increase  in  live  stock  from 
1840  to  I860: 

Live  Stock  in  the  United  States,  1840-1860. 


Live  stock  (in  millions) 

1840 

1850 

1860 

Horses  and  mules 

Neat  cattle 

4.3 
14.9 
19.3 
26.3 

4.8 
18.2 
21.7 
30.3 

7.3 

25.6 

Sheep 

Swine 

22.4 
33.5 

^  211.  Changes  in  fanning.  —  One  of  the  effects  of  all  these 
irnprovements  in  harvesting  and  marketing  the  crops  was  a 
greater  specialization  in  farming.  The  transfer  of  grain  pro- 
duction to  the  western  States,  brought  about  by  improved 
methods  of  transportation,  had  begun  the  change  in  New 
England  agriculture  which  in  time  completely  transformed  it. 
Market  gardening  increased  greatly  in  New  England  and  the 


APPLICATION    OF    MACHINERY    TO    AGRICULTURE     245 

middle  Atlantic  States,  while  a  little  further  West  orchard 
products  received  greater  attention.  The  two  together  in- 
creased in  value  from  $3,000,000  in  1840  to  $35,800,000  in  1860. 
On  the  western  farms  there  was  greater  specialization  in  cereal 
production,  which  permitted  the  use  of  more  expensive 
machinery  and  more  capital. 

The  number  of  planters  and  farm  laborers  was  increasing 
more  rapidly  than  the  number  of  independent  farmers,  seeming 
to  indicate,  even  thus  early,  the  introduction  of  capitalistic 
methods  into  agriculture.  The  average  size  of  the  farms  in  the 
United  States  declined  from  203  acres  in  1850  to  194  acres  in 
1860,  owing  probably  to  the  large  number  of  settlers  taking 
up  minimum  claims  on  the  public  lands.  The  cotton  and  sugar 
plantations  of  the  southern  States,  as  Alabama,  Arkansas, 
Florida,  Louisiana,  Mississippi,  and  Missouri,  showed  an  in- 
crease in  average  size;  with  the  exception  of  California,  the 
southern  States  were  the  only  ones  in  which  there  was  any 
considerable  number  of  farms  of  over  1000  acres.  The  total 
values  produced  on  the  farms  at  each  decennial  date  was 
estimated  at  580  million  dollars  in  1840,  800  million  in  1850, 
and  1250  million  in  1860.  In  spite  of  the  rapid  progress  in 
manufactures  and  commerce,  the  country  still  remained  pre- 
dominantly agricultural,  over  40  per  cent,  of  the  population 
being  dependent  upon  agriculture. 

212.  The  grain  trade  of  the  United  States.  —  Until  the 
building  of  railroads  in  the  western  States  the  grain  trade  de- 
veloped very  slowly;  the  first  shipment  of  wheat  from  Chicago 
was  not  made  until  1838.  With  the  completion  of  the  system 
of  canals  and  later  of  railroads,  the  grain  resources  of  the  lake 
basin  were  opened  up  and  the  trade  greatly  stimulated,  so  that 
by  1860  the  total  shipments  of  grain  and  flour  eastward  from 
ports  on  Lake  Michigan  alone  amounted  to  43.211,448  bushels. 
During  the  period  1840-60  the  production  of  grain  in  the  north- 
western States  was  estimated  to  have  increased  from  218,- 
463,583  to  642,120,366  bushels.  Of  this,  however,  only  a 
very  small  portion  was  exported;  on  an  average  not  over  10 


246      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 


per  cent.     The  following  census  table  shows  the  increase  in  the 
value  of  the  grain  exports: 

Exports  of  Grain,   1823-1863 


Years 

Aggregate  Value  of  Exports 
of  Grain 

Percentage  of 
Increase 

1823-1833 
1833-1843 
1843-1853 
1853-1863 

$67,842,211 

73,303,440 

198,594,871 

512,380,514 

8.0 
170.9 
158.0 

Great  as  this  increase  was  in  the  last  two  decades,  especially 
after  the  repeal  of  the  British  corn  laws  in  1846,  the  produce 
of  a  single  State  like  Illinois  far  exceeded  the  total  exports. 
The  real  development  of  the  export  grain  trade  belongs  to  the 
next  period.  Practically  all  of  the  exports  were  now  made  via 
the  Atlantic  ports,  the  New  Orleans  grain  trade  having  entirely 
disappeared;  in  1860  only  2189  bushels  of  wheat  were  shipped 
from  that  port.  On  the  other  hand,  the  southern  exports  of 
cotton  —  w^hich  constituted  about  one  half  of  our  total  exports 
in  value  —  of  sugar,  tobacco,  and  rice,  had  grown  prodigiously. 

213.  Home  consumption  of  products.  —  It  is  evident  that 
w^  hen  only  4  percent,  of  the  cereal  production  of  the  country, 
or  40  million  bushels  of  grain  out  of  a  total  crop  of  1000  million 
bushels,  is  exported,  the  home  market  is  infinitely  more  im- 
portant than  the  foreign.  And  yet  the  greatest  interest  has 
always  properly  enough  attached  to  the  export  trade,  for  the 
^price  at  home  of  wheat,  cotton,  and  other  agricultural  exports 
has  been  determined  by  the  price  ruling  in  Europe,  and  more 
particularly  in  England.  The  vast  growth  of  manufactures 
in  the  eastern  States  created  a  demand  in  that  section  for 
western  produce;  in  1863,  Governor  Andrew  of  Massachusetts 
estimated  that  the  consumption  of  western  agricultural  prod- 
ucts in  New  England  amounted  to  $50,000,000  yearly. 

On  the  other  hand,  the  devotion  in  the  southern  States  to 


APPLICATION    OF    MACHINERY    TO    AGRICULTURE     247 

the  cultivation  of  a  few  staple  crops  —  cotton,  tobacco,  sugar, 
and  rice  —  created  profitable  home  markets  for  the  grain  of 
the  Northwest.  Much  of  the  corn,  too,  was  not  consumed  as 
such,  but  was  fed  to  stock,  especially  swine,  which  were  then 
more  easily  marketed  than  the  original  product.  The  increase 
in  the  tonnage  of  the  lakes,  from  76,000  tons  in  1845  to  391,220 
in  1860,  and  of  railroad  mileage,  from  2818  miles  in  1840  to 
30,635  in  I860,  sufficiently  indicate  the  growth  of  the  internal 
trade  of  the  country. 

214.  Pre-emption  of  the  public  lands.  —  The  rapid  peopling 
of  the  West  and  the  settlement  of  the  public  domain  made 
necessary  a  better  method  of  disposing  of  the  land  to  actual 
settlers  than  had  prevailed.     Under  the  previous  system  of 
sales  many  of  the  most  desirable  tracts  were  bought  and  held 
by  speculators  or  for  investment.     As  the  incoming  popula- 
tion pressed  in,  it  tended  in  its  haste  to  pass  beyond  the  sur- 
veyed lands  and  to  settle  in  the  wilds  before  they  had  been 
opened  to  settlement.     For  the  benefit  of  those  already  upon 
the  soil  and  of  future  residents  the  pre-emption  system  was 
gradually  developed.     '^  Pre-emption  is  a  premium  in  favor  of, 
and  condition  for,  making  permanent  settlement  and  a  home." 
"  The   essential   conditions   of   pre-emption   are   actual   entry  i 
upon,  residence  in  a  dwelling,  and  improvement  and  cultiva-  I 
tion  of  a  tract  of  land."     It  was  not  a  free  grant  of  land,  but  j 
simply  a  privilege  to  the  settler  of  purchasing  at  the  established  !  i- 
price  the  land  upon  which  he  had  settled,  without  competition  * 
of  any  sort.     The  first  general  pre-emption  act  was  passed  in 
1830  as  a  temporary  measure  and  was  continued  each  year 
until  superseded  by  the  permanent  law  of   1841.     The  policy 
of  disposing  of  the  public  lands  primarily  for  homes  had  now 
been  definitely  adopted.     Except   during  the  panic  of  1857, 
the  sales  during  this  period  were  steady  and  kept  pace  with  the 
settling  of  the  West,  averaging  about  three  and  one  half  million 
acres  a  year. 

215.  Grants  of  land.  —  In  addition  to  its  use  for  purposes  of 
settlement,  the  public  domain  of  the  United  States  has  also 


!/ 


APPLICATION    OF    MACHINERY    TO    AGRICULTURE     24!) 

been  employed  to  encourage  internal  improvements,  for  edu- 
cational purposes,  and  in  direct  gifts  to  individuals  and  States. 
By  the  ordinance  of  1785  it  was  provided  that  one  thirty-sixth  L^ 
of  the  public  lands  should  be  reserved  for  the  support  of  the  '^ 
common  schools,  and  since  1848  one  eighteenth  has  been  so 
reserved  in  all  States  entering  the  Union  after  that  date.  Be- 
ginning with  1841,  the  lands  were  recklessly  alienated  by  Con- 
gress; during  the  period  1841-60,  65,701,312  acres  were  granted 
to  individuals.  105,131,877  acres  were  granted  to  States  for 
purposes  other  than  internal  improvements,  of  which  the 
largest  single  gift  was  that  in  1849  of  all  the  '^  swamp  and 
overflowed  lands  "  within  the  limits  of  any  State;  and 
29,820,337  acres  were  granted  to  States  and  corporations  for 
internal  improvements.  Of  a  total  of  269,406,415  acr-es 
disposed  of  during  this  twenty-year  period,  only  68,752,889 
acres  were  sold,  the  rest  being  generously  —  or  improvidently 
—  given  away  l:)y  Congress. 

SUGGESTIVE  TOPICS   AND   QUESTIONS.     CHAITER   XVIII 

1 .  Trace  the  changes  in  the  agricultural  products  of  some  typical 
State,  us  Massachusetts,  New  York,  Ohio,  Iowa.  [Census  vols,  on  Agric, 
1850-1900.] 

2.  Trace  the  westward  movement  of  agriculture  in  the  United  States 
since  1850.     [Twelfth  Census  (1900),  vol.  Agric,  Part  1,  37.]    _ 

3.  Is  the  price  of  wheat  and  cotton  in  the  United  States  fixed  l)y  the 
price  offered  in  London  or  New  York?  Why?  [Bullock,  Introduction, 
185;  Marshall,  Principles,  403.] 

4.  What  objections  can  you  think  of  to  the  introduction  of  improved 
farm  machinery?  [M.  B.  Bateman,  in  Ohio  Agric.  Rep.,  1869;  Quaintance, 
40;  Rep.  Ind.  Com.,  X,  132,  256.] 

5.  Does  the  introduction  of  farm  machinery  increase  or  reduce  the 
number  of  farm  laborers?     [Quaintance,  29-45;  Bryn,  chap.  16.] 

6.  Why  Avas  Cincinnati  the  seat  of  the  pork-packing  industry  prior 
to  the  Civil  W^ar?  Why  does  Chicago  now  hold  first  place?  [Adams, 
Com.  Geogr.,  80.] 

7.  What  was  the  attitude  of  foreign  nations  to  the  reception  of  our 
wheat  and  flour  during  this  period? 

8.  The  per  capita  consumption  of  wheat  in  .the  Ignited  States  was 
seven  bushels  in   1860.     What    is   it   to-day?     Has   the   amount   raised 


250      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

kept    pace    with    the    increase    in    population?     What    do    the    figures 
show? 

9.  What  was  the  quahty  of  the  fruit  in  the  United  States  about  1840? 
How  has  it  been  improved?  [Mrs.  TroUope,  Domestic  Manners  of  the 
Americans,  88;  Bailey,  Plant  Breeding,  4th  ed.,  227-314.] 

10.  What  is  the  best  trotting  record  to-day?  Was  "  Yankey's  "  per- 
formance remarkable?     [World  Almanac] 

11.  What  were  the  British  corn  laws?  Why  were  they  repealed? 
[Johnson,  Great  Events,  XVII,  11-24;  Levi,  Hist,  of  British  Commerce, 
Part  4,  chap.  4;  Palgrave,  Dictionary  of  Pol.  Econ.,  art.  Corn  Laws.] 

12.  Who  was  Richard  Cobden,  and  what  were  his  public  services? 
[J.  Morley,  Life  of  Richard  Cobden;  Palgrave,  Diet,  of  Pol.  Econ.;  Bliss, 
Encycl.  of  Soc.  Ref.;  Encycl.] 

SELECTED   REFERENCES.     CHAPTER  XVIII 

**Brewer:  Report   on   the  Cereal   Production   of  the   United  States,   in 
Tenth  Census  (1880),  vol.  on  Agriculture,  Part  2. 

* Eighth  Census  (1860),  Preliminary  RepoH,  90-99. 

* Eighty  Years'  Progress,  30-130. 

*Johnston:  Notes  on  North  America,  I,  chaps.  6-8;  II,  chaps.  23-30. 
**Peto:  Resources  and  Prospects  of  the  United  States,  54. 
*Shaler:  The  United  States,  chaps.  5-7. 

Allen:  American  Cattle. 

Bolles:  Industrial  History  of  the  United  States,  book  I,  chaps.  4,  10,  14. 

Reports  TT.  S.  Dept.  of  Agric,  1850,  p.  551;  1853,  p.  50;  1862,  pp. 

6&-73;  1866,  p.  498. 
Sato:  History  of  Land  Question  in  the  United  States,  159-163. 
Seaman:  Progress  of  Nations,  I,  chap.  9. 
Woolsey:  First  Century  of  the  Repubhc,  176-185. 


CHAPTER   XIX       X  ^  I  '  ' 


SLAVERY  AND  THE   SOUTH 

216.  The  development  of  the  South.  —  While  the  country 
as  a  whole  had  made  marvelous  industrial  progress  during  this 
period,  the  benefits  were  confined  largely  to  the  North  and  ^^^ 
West.  The  great  advances  in  manufactures,  in  agricultural 
improvements,  and  in  commerce  had  scarcely  affected  the 
South.  The  reason  for  this  industrial  backwardness  was  the 
institution  of  slavery,  and  to  a  fuller  discussion  of  slavery  as  a 
system  of  labor  we  must  now  turn.  Two  thirds  of  the  popula- 
tion and  a  still  greater  proportion  of  the  wealth  of  the  country 
were  in  the  northern  States  in  1860.  Of  the  S3,736,000,000  of 
wealth  produced  in  1859,  over  $2,818,000,000  came  from 
northern  farms  and  factories.  By  far  the  greater  part  of  the 
manufacturing  and  mining  industries  of  the  country  were 
situated  there.  In  fact,  the  South  had  lagged  far  behind  the 
North  in  the  industrial  advance  of  the  previous  half  century. 

''  The  whirl  and  rush  of  this  progress  encompassed  the  South 
on  every  side  .  .  .  Yet  alone  in  all  the  world  she  stood  un- 
moved by  it;  in  government,  in  society,  in  employment,  in 
labor,  the  States  of  the  South,  in  1860,  were  substantially  what 
they  had  been  in  1810,  when  the  abolition  of  the  slave-trade 
had  impressed  upon  their  development  the  last  modification 
of  form  of  which  it  seemed  susceptible." 

217.  The  growth  of  slavery.  —  With  the  increased  demand 
for  cotton,  the  cotton  belt  had  gradually  spread  westward 
until  in  1860  it  stretched  from  the  Atlantic  across  the  southern 
States  and  over  the  greater  part  of  Texas.  At  the  same  time 
the  production  of  cotton  had  almost  trebled  between  1840  and 
1860.     Hand  in  hand  with  this  extension  of  cotton  territory 

251 


252      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 


Cotton  Picking 
Cotton  picking  began  about  the  first  of  August  in  the  eastern  States 
and  continued  until  the  middle  of  December  in  the  west.  The  field 
had  to  be  gone  over  again  and  again,  as  only  the  ripened  blooms  were 
picked  each  time.  This  was  a  tedious  but  not  laborious  task,  and 
employed  women  and  children  as  well  as  men.  An  average  hand 
would  pick  about  200  lbs.  a  day,  while  some  skilled  pickers  reached 
as  high  as  400  or  500  lbs.  a  day. 


SLAVERY    AND    THE    SOUTH  253 

and  of  production,  had  proceeded  the  growth  in  the  number 
of  slaves,  from  677,897  in  1790  to  2,009,043  in  1830  and  ^ 
3,953,760  in  1860.  How  dependent  the  growth  of  cotton  was 
upon  the  extension  of  shivery  can  easily  be  seen  by  noting  the 
concentration  of  slaves  in  the  cotton-growing  States.  In  1840 
over  two  thirds  of  the  slave  population  were  in  the  ten  cotton- 
growing  States,  while  in  1860  nearly  three  fourths  were  to  ])e 
found  there.  Of  this  large  number  a  considerable  proportion 
had  been  added  by  an  illicit  slave-trade  with  Africa,  but  the 
greater  part  was  the  natural  increase  of  the  slave  population. 
Slave-breeding  was  carried  on  in  the  border  States  of  Virginia, 
Maryland,  and  Kentucky,  where  there  was  diminishing  oppor- 
tunity for  negro  employment,  resulting  in  a  vigorous  slave- 
trade  wdth  the  cotton-growing  States.  Olmsted  calculates 
that  the  average  importations  of  slaves  .into  seven  of  the 
southern  States  during  the  decade  1850-1860  was  about  25,000 
annually. 

218.  Nature  of  slavery.  —  Slavery  is  essentially  a  system 
of  forced  labor;  the  worker  does  not  reap  the  reward  of  his  toil 
and  is  consequently  less  interested  in  its  results.  Under  a 
system  of  free  labor  the  full  returns  of  his  labor  belong  to  the 
laborer;  the  motive  to  exertion  is  self-interest  instead  of  fear, 
and  consequently  the  diligence  and  application  are  many  times 
greater.  On  the  other  hand,  the  whole  fruit  of  the  slave's  toil 
belonged  to  his  master,  who  had  to  make  in  return  only  a 
small  outlay  for  maintenance.  How  far  the  small  running 
expenses  offset  the  meager  returns  from  slave  labor  was  the 
economic  problem  involved  in  the  system  of  slavery.  Was  it 
more  remunerative  to  the  slave-owning  population  than  a 
system  of  free  hired  labor,  quite  irrespective  of  the  rights  or 
interests  of  the  slaves?  Southern  waiters  before  the  Civil  War 
insisted  that  the  prosperity  of  the  South  was  bound  up  in  the 
''peculiar  institution,"  and  that  to  destroy  slavery  was  to/ 
ruin  southern  industry;  as  a  matter  of  fact,  nearly  nine  tenths^ 
of  the  cotton  was  raised  by  slave  labor.  The  following  quo- 
tation from  a  speech  of  Governor  Hammond,  of  South  Carolina, 


254      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

himself  a  violent  defender  of  slavery,  states  fairly  the  enlight- 
ened southern  view  on  this  point  about  1850:  "  I  agree  that  as  a 
general  rule  it  must  be  admitted  that  free  labor  is  cheaper  than 
slave  labor.  It  is  a  fallacy  to  suppose  that  ours  is  unpaid 
labor.  And  I  have  no  hesitation  in  saying,  that  if  I  could 
cultivate  my  land  on  these  terms,  I  would  without  a  word 
resign  my  slaves,  provided  they  could  be  properly  disposed  of. 
But  the  question  is  whether  free  or  slave  labor  is  cheapest  to 
us  in  this  country,  at  this  time,  situated  as  we  are.  And  it  is 
to  be  decided  at  once  by  the  fact  that  we  cannot  avail  ourselves 
of  any  other  than  slave  labor." 

219.  Advantages  of  slave  labor.  —  There  were  certain  sur- 
face advantages  in  a  system  of  slavery.  After  his  original  in- 
vestment, the  sla\'e-holder  paid  only  the  cost  of  maintaining 
his  slaves  and  then  possessed  himself  of  their  entire  output. 
As  a  result  of  his  absolute  control  over  his  slaves,  the  owner 

.  could  direct,  organize,  combine,  and  move  them  as  he  saw  fit  for 
^  the  attainment  of  his  ends.  On  the  other  hand,  in  order  to  utilize 
to  the  utmost  these  advantages,  those  crops  had  to  be  cultivated 
w^hich  would  permit  of  their  application  in  the  highest  degree. 
Of  all  crops  cotton  conformed  most  perfectly  to  the  conditions 
necessary  to  a  profitable  use  of  slave  labor.  Cotton  culture 
was  very  simple,  requiring  few  tools  and  only  routine  work. 
Furthermore,  it  gave  employment  for  nine  months  in  the  year, 
so  that  the  slave  was  idle  very  little  of  the  time.  And,  most 
important  of  all,  it  permitted  the  organization  of  labor  on  a 
large  scale;  a  single  slave  could  not  cultivate  more  than  five  or 
six  acres  (as  compared  with  thirty  or  forty  acres  in  the  case  of 
t  corn),  and  they  could  therefore  be  more  compactly  massed 
than  in  the  case  of  cereal  crops.  Owing  to  their  ignorance 
and  lack  of  versatility  it  was  possible  to  employ  the  negroes 
only  on  staple  crops  which  called  for  mechanical  labor.  The 
cultivation  of  cotton,  which  met  these  requirements  in  a  high 
degree,  firmly  entrenched  slavery  and  caused  its  rapid  extension. 

220.  Defects  of  slave  labor.  —  That  the  negro  slave,  at  best 
only  a  generation  or  two  removed  from  African  barbarism, 


SLAVERY    AND    THE    SOUTH 


255 


should  have  remained  below  the  industrial  standard  of  the 
white  man,  with  his  centuries  of  training,  was  natural.  When 
to  inherited  incapacity  are  added  the  defects  of  the  system  of 
slavery,  one  cannot  feel  suprised  at  the  inferiority  of  slave 
labor.  Since  his  labor  was  forced,  the  slave  gave  it  reluctantly;/ 
he  put  as  little  strength  and  earnestness  into  his  work  as  was 
compatible  with  safety  from  flogging.  Olmsted  concluded  that 
slaves  were  hardly  one  half  as  efficient  as  free  laborers.     This 


Copyright,  1903,  by  Detroit  Publishing  Co. 

Sorting  Cottox 
After  being  brought  from  the  field  the  cotton  is  dumped  in  a  shed, 
on  the  larger  plantations,  where  it  is  sorted  and  classified  accord- 
ing to  the  length  of  the  staple.  It  is  then  ginned  in  bales.  AVhen 
cotton  is  bought  in  the  bale,  the  purchaser  always  samples  it  by 
taking  out  a  l^it  of  the  cotton. 


disinclination  to  work,  and  the  frequent  shamming  it  led  to, 
necessitated  the  use  of  highly  paid  overseers,  which  tended  to 
offset  the  cheapness  of  the  slave  labor.  Another  character- 
istic was  its  ignorance,  clumsiness,  and  wastefulness.  Only 
the  heaviest  and  simplest  tools  could  be  used;  improved 
implements  and  machinery  and  fine  live  stock  could  not  be 
entrusted   to   the   slaves   on    account    of   their  wasteful   and 


256      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

indifferent  destruction  of  capital.  The  inefficiency  of  slave 
labor  as  compared  with  the  responsible  and  intellioent  free 
labor  of  the  North  was  thus  greatly  enhanced.  As-  it  was 
impossible  to  introduce  improvements  in  methods  of  agricul- 
ly  ture  or  labor-saving  devices  into  the  South,  this  section  of  the 
country  tended  continually  to  fall  farther  behind  the  rest  of 
the  nation  in  the  relative  production  of  wealth.  Finally, 
the  lack  of  interest,  of  elasticity,  and  of  versatility  of  slave 
y  labor  confined  the  southern  States  to  a  few  staple  agricultural 
crops,  and  entirely  prevented  any  diversification  of  industry 
or  the  rise  of  manufactures. 

221.  King  cotton.  —  There  w^as,  as  we  have  seen,  a  growing 
concentration   in  the   South  upon  the   cultivation   of  cotton. 

y  This  movement  was  greatly  stimulated  by  the  great  advance 
/  in  the  price  of  that  staple  from  less  than  six  cents  a  pound  in 
1845  to  nearly  fourteen  cents  in  1857.  In  the  decade  1850- 
60  the  production  per  inhabitant  in  the  southern  States  of 
every  important  cereal  product,  of  cattle  and  swine,  even  of 
the  products  peculiar  to  the  slave  States,  as  flax,  rice,  and 
sugar,  fell  off  absolutely,  while  in  the  production  of  tobacco 
the  increase  was  relatively  less  than  in  the  northern  States. 
In  the  case  of  cotton  alone  there  was  a  relative  as  well  as  an 
absolute  gain;  it  more  than  doubled  in  the  twenty  years,  from 
1,976,000  bales  in  1840  to  4,675,000  in  1860.  It  is.  evident 
that  almost  the  entire  labor  force  and  capital  of  the  South 
were  being  directed  into  the  one  channel,  the  production  of 
cotton.  There  was  indeed  truth  in  the  statement  so  often 
made,  that  ''  Cotton  is  King."  Sevenei£hths  of  the_jvor1d's 
supply  of  that  .atimlg.  wasgrown  in  the  South.  The  expanding 
economic  demand  for  the  one  staple  which  could  be  grown 
under  slavery  caused  an  extension  of  the  slave  system  and 
entrenched  it  still  further.  This,  in  turn,  had  yet  other  con- 
sequences of  great  influence  upon  the  South. 

222.  The  plantation  system.  —  Under  slavery  the  large 
plantation  system  was  almost  a  necessity..  Both  the  nature 
of  the  crop  and  the  character  of  the  labor  rendered  cultivation 


SLAVERY    AND    THE    SOUTH  257 

on  a  large  scale  the  most  economical.  Intensive  methods  of 
farming  were  an  impossibility  under  the  indifferent  and  waste- 
ful slave  system.  Consequently,  the  colonial  method  was 
persisted  in,  of  cropping  a  piece  of  land  until  it  was  exhausted 
and  then  moving  on  to  a  fresh  piece.  Such  a  system  required 
practically  unlimited  quantities  of  new  and  fertile  lands;  the 


Copyright,  1907,  by  Underwood  and  Underwood 

Cotton  Levee  at  New  Orleans 
Beginning  about  the  first  of  September,  the  cotton  is  picked;  after 
being  ginned  it  is  sent  to  the  interior  markets  for  sale.  The  cotton 
bought  for  export  is  then  sent  to  the  seaports,  whose  wharves  are 
loaded  with  bales  from  October  to  January.  New  Orleans  is 
one  of  the  principal  cotton  seaports. 

need  of  new  lands  for  cott  on -throwing:  wasjndeed  nn  important   C 
factor  in  the  effort  to  widen  our  boundaries  by  the  inclusion  of 
Texas,  Mexico,  and  the  lands  to  the  southwest.     This  method 
involved  at  once  an  enormous  waste  of  natural  resources  and  a  [/' 
rapid  exhaustion  of  the  soil.     In  every  southern  State  there    . 
were  enormous  tracts  of  exhausted  and  abandoned  cotton  lands; 
18 


^ 


258      ECONOMIC   HISTORY    OF    THE    UNITED   STATES 


1 


in  fact,  the  uncultivated  land  far  exceeded  the  cultivated. 
The  following  table  ^  shows  the  difference  in  this  respect 
between  the  different  parts  of  the  country: 

Agricultural  Development  in  Free  and  Slave  States 


Free  States 

and 
Territories 

Border  States 

(111.,  Md.,  Ky., 

and  Mo.) 

Slav^e  States 

Improved  land  (acres)  . 
Unimproved  land  (acres) 
Total  quantity  (acres)  . 

88,730,678 

72,983,311 

161,713,989 

$4,091,818,132 

$25.30 

$142,077,802 
$574,067,208 

17,547,885 

27,474,315 

45,022,200 

$702,518,382 

$15.60 

$21,068,903 
$133,484,109 

56,832,157 

143,644,192 

200,476,349 

$1,850,708,493 

$9.28 

$82,971,438 

$381,778,598 

Average  value  per  acre 
Agricultural  implements 

Live  stock,  value 

223.  Effect  on  the  production  of  cotton.  —  The  result  of 
such  a  system  was  first  that  the  production  of  cotton,  great  as 
it  was,  did  not  begin  to  equal  the  capabilities  of  the  South. 
Only  a  small  part  of  the  land  was  cultivated;  in  1850  De  Bow 
calculated  that  the  entire  cotton  crop  of  that  year  was  grown 
on  only  5,000,000  acres.  And,  secondly,  since  its  cultivation 
depended  so  largely  on  slave  labor,  its  production  increased 
only  with  the  growth  of  slavery.  As  this  form  of  labor  was 
increased  at  the  best  more  slowly  than  similar  supplies  of  free 
labor  would  have  been,  the  system  of  slavery  stifled  the  progress 
of  the  South  even  in  that  branch  of  production  in  which  it  was 
supposed  to  excel  and  to  which  it  had  sacrificed  all  others. 
There  was  no  equilibrium  between  supph^  and  demand;  since 
his  capital  was  all  invested  in  slaves  and  cotton  lands,  the 
planter  found  it  practically  impossible  to  decrease  his  produc- 
tion in  times  of  over-supply  and  equally  difficult  to  increase  it 
rapidly  when  the  demand  rose.  Cotton  growing  was  thus 
extremely    uncertain    and    speculative.     The    production    of 


Seaman,  Progress  of  Nations,  II,  572 


SLAVERY    AND    THE   SOUTH  259 

cotton  probably  lagged  behind  the  economic  demand  during 
tlie  decade  and  a  half  before  the  war,  as  is  shown  by  the  rising 
price  of  that  commodity  and  by  the  great  increase  in  the  price 
of  slaves.  In  1840  the  average  value  of  all  slaves  dependent 
on  cotton  culture  was  estimated  by  De  Bow  at  $500;  twenty 
years  later  Olmsted  found  that  good  field  hands  were  worth 
S1400  on  the  average,  while  as  high  as  S2000  was  sometimes 
paid. 

224.  The  economic  cost  of  slave  labor.  —  That  slavery  in- 
volved an  economic  loss  to  the  nation  and  also  to  the  South  as 
a  whole  is  evident.  Was  it  profitable  to  the  slave-owner? 
The  items  involved  in  the  yearly  cost  of  a  slave  to  his  master 
were  many,  including  interest  on  capital,  cost  of  maintenance 
(food,  clothing  and  lodging),  depreciation^  taxation,  and  insur-< 
ance  against  death,  sickness,  and  flight.  A  moderate  estimate 
for  all  of  these  would  be  not  less  than  SI 35  a  year;  that  this  is 
not  excessive  is  shown  by  the  rate  of  slave  hire,  which  ranged 
from  S140  to  $150  in  Georgia  in  the  twenty  years  prior  to  the 
Civil  War.  As  negro  agricultural  laborers  can  be  hired  in  the 
same  State  to-day  for  $120  a  year  with  board,  it  is  clear  that 
the  bare  cost  of  slave  labor  was  as  high  as  the  services  of  the 
negroes  in  a  state  of  freedom  at  present.  A  report  made 
to  the  Secretary  of  the  Treasury  about  1850  by  forty-six  sugar 
planters  of  Louisiana  gave  the  cost  of  feeding  and  clothing 
an  able-bodied  slave  at  $30  a  year,  of  which  probably  $20  went 
for  food.  This  was  five  and  a  half  cents  a  day.  The  diet  of 
the  slaves  was  coarse  but  wholesome;  cornmeal,  with  molasses, 
and  generally  bacon,  were  the  staples.  The  clothing  was  of 
the  coarsest,  and  the  cabins,  while  rude,  were  probably  as  good 
as  the  inmates  could  appreciate.  Any  comparison  between 
slave  labor  and  white  free  labor  must  be  misleading,  for  many 
of  the  defects  in  the  system  were  due  to  the  fact  that  the  slave 
was  a  negro  as  well  as  a  bondman.  The  real  problem  involved 
was  that  of  the  relative  efficiency  of  slave  and  free  negro  , 
labor,  the  answer  to  which  is  the  solution  of  the  labor  problem 
of  the  South  to-dav. 


260      ECONOMIC    HISTORY    OF    THE    UNITED   STATES 

/  ^5.  Character  of  plantation  management.  —  The  defects  of 
^  the  system  were,  however,  not  whoUy  due  to  the  quality  of  the 
/iabor;  the  incapacity  of  the  masters  was  also  responsible  for 
the  failure  of  agriculture  in  the  South.  The  absence  of  rota- 
tion or  diversification  of  crops  and  of  the  use  of  fertilizers  to 
V  [prevent  the  exhaustion  of  the  soil,  of  improved  live  stock,  of 
machinery,  building,  and  fences;  in  short,  the  lack  of  a  scien- 
tific agriculture,  even  among  the  small  planters  without 
slaves,  was  a  frequent  matter  of  complaint  in  southern 
journals  and  conventions.  Large  plantations  were  the  rule: 
the  average  size  of  the  farms  in  the  ten  cotton  States  in  1850 
was  273  acres,  and  this  had  considerably  increased  by  1860. 
Some  of  the  cotton  plantations  contained  over  10,000  acres. 
With  the  large  plantations  there  went  also  large  gangs  of  slaves. 
On  the  large  cotton  plantations  absenteeism  of  the  owners  was 
the  rule,  while  the  management  was  left  to  an  overseer,  who 
sought  only  to  obtain  the  largest  possible  crop  without  regard 
to  the  future.  Educated  by  the  very  system  under  which 
they  operated  their  plantations  to  feel  contempt  for  labor, 
often  unenterprising  and  lazy,  the  planters  spent  little  time  on 
their  estates,  which  were  consequently  greatly  neglected. 
Most  of  the  year  was  spent  in  the  cities.  Moreover,  the  profits 
secured  from  cotton  production,  instead  of  going  to  improve 
the  land,  were  sunk  in  the  purchase  of  fresh  fields  and  addi- 
tional slaves.  The  capital  of  the  South  was  thus  invested  in 
fixed  forms  which  tied  it  down  to  prevailing  methods  and 
permitted  no  improvement  or  diversification  from  year  to  year. 
226.  Moral  effects  of  slavery.  —  The  effects  of  slavery 
^obviously  did  not  end  with  the  economic  losses  involved;  more 
insidious  and  harmful  were  the  moral  results.  Not  only  were 
the  marriage  relations  among  the  negroes  loose  in  the  extreme, 
but  they  were  rendered  still  more  so  by  the  breaking  up  of 
families  through  sale.  Such  a  state  of  affairs,  together  with 
the  possession  of  unlimited  power  on  the  part  of  masters  and 
lax  morals  on  the  part  of  female  slaves,  reacted  upon  the  rela- 
tions between  the  whites   and   blacks.     Of  the  treatment   of 


SLAVERY    AND    THE   SOUTH 


2G1 


slaves  it  is  difficult  to  speak  with  accuracy.  On  (he  liir^e 
cotton  and  sugar  plantations,  especially  in  the  malarious  rice 
fields  of  Georgia  and  South  Caro- 
lina, the  negroes  suffered  most. 
Here  they  were  under  the  direc- 
tion of  overseers  and  were  driven 
and  herded  in  gangs.  House  ser- 
vants and  those  owned  in  small 
numbers  were  usually  treated  with 
humanity  and  even  consideration. 
The  possession  of  absolute  power 
by  practically  irresponsible  mas- 
ters must  often  have  led  to  the 
abuse  of  that  power  and  to  in- 
human conduct.  Flogging  neces- 
sarily accompanied  the  system  of 

slave  labor,  but  wanton  cruelty    rp,.        "^^^'^^^-^-^  'v^^^.,,    , 

^      Iniscutwas  a  lamiliar  illustra 
in   the   use   of    the   lash   certamly     tion    in    Southern    newspapers, 

did  not  rule.     The  treatment  was 

probably    severest,    or    at    least 

the  supervision  w^as  strictest,  in 

the   border   States,  where    there 

was  constant  danger  of  running 

away.     Slaves  were  regarded  as  only  a  form  of  property;  they 

were  sold   and  transferred  like  other  commodities.     Regular 

slave-markets  were  held  where  slave-dealers  auctioned  off  their 

human  chattels.     To  the  credit  of  the  South  it  must  be  said 

that   the  slave-dealer  was    usually   a  social    outcast.     Every 

effort   was    made   to   keep  the   slave   from  rising,  and  while 

religious    instruction    was    generally    given,    education    was 

strictly  forbidden  by  law. 

227.    Slavery  and  the  population.  —  The  ownership  of  the 

slaves  was  concentrated  in  a  very  few  hands.      Less  than  5 

per  cent,  of  a  population  of  8,000,000  whites  in  the  southern 

States  owned  the  3,950,000  slaves  in  the  United  States  in  1860. 

Associated  with  these  actual  slave-owners  were  many  who, 


where  it  headed  the  advertise- 
ments of  runaway  slaves.  The 
following  is  an  example  of  such 
an  advertisement:  "Ran  away, 
negress,  Caroline;  had  on  a  collar 
with  one  prong  turned  down." 


262      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

while  not  slavo-owners  themselves,  sympathized  thoroughly 
witli  them  in  llieir  attitude  towards  slavery.  The  population 
of  the  South  was  thus  strongly  stratified  as  a  result  of  the 
existence  of  this  institution.  At  the  top  stood  the  slave-owners 
and  the  professional  and  commercial  classes.  At  the  other 
extreme  were  the  slaves,  who  may,  however,  be  further  differ- 
entiated into  field  hands,  house  servants,  and  artisans,  nie- 
clianics,  etc.  Between  these  came  that  most  miserable  and 
shiftless  class  known  as  poor  whites,  w^hose  position  as  free 
laborers  in  a  slave  society  exposed  them  to  the  scorn  of  l:)oth 
slaves  and  shu'e-owners.  There  was  also  a  small  and  growing 
num])er  of  free  negroes,  though  most  of  these  were  to  be  found 
in   the   Xoi'lh. 

>  228.  Progress  of  the  South  prevented.  —  Slavery  prevented 
\\w  growth  of  population  in  the  South.  Although  they  had 
started  out  almost  even  in  1800.  the  North  had  increased  much 
more  rapidly,  having  in  1860  a  population  of  19,083,927,  as 
against  12,315,374  in  the  South.  Much  of  this  increase  natu- 
rally came  from  foreign  immigration,  which  avoided  the  slave 
States  and  peopled  the  central  States  and  the  great  Northwest. 
Greater  than  this  loss,  however,  was  the  lack  of  diversified 
industries  in  the  South.  Not  merely  was  agriculture  confined 
to  a  few  staple  crops,  but  most  important  of  all,  manufactures 
and  mining  were  prevented  from  developing.  The  southern 
States  were  rich  in  natural  resources,  deposits  of  iron  and  coal, 
timber  and  water-power,  but  these  remained  absolutely  un- 
developed prior  to  the  Civil  War.  It  was  impossible  to  carry 
on  these  industries  with  slave  labor,  and  so  long  as  slavery 
existed,  neither  free  labor  nor  capital  could  be  attracted  to 
their  exploitation.  Of  the  real  and  personal  property  in  the 
country,  $10,957,000,000  out  of  a  total  of  $16,159,000,000  was 
credited  to  the  northern  States  in  1859.  Industrially  and 
commercially  the  South  remained  stagnant,  and  not  until  w^ar 
had  abolished  slavery  was  it  prepared  for  the  splendid  industrial 
advance  upon  which  it  has  now  tardily  entered: 

229.    Summary:  Sectional  divergence.  —  The  most  striking 


SLAVERY    AND    THE   SOUTH  263 

characterislif  of  this  j)eriod  was  the  growing  sectional  diver- 
gence of  North  and  South.  The  North  was  developing  its 
manufactures  and  finding  a  rapidly  expanding  market  for  them 
in  the  growing  population  of  the  West,  while  this  section  was 
exchanging  for  these  its  surplus  agricultural  products.  E?.st 
and  West  were  rapidly  becoming  economically  integrated  and 
forming  together  a  state  that  was  already  almost  self-sufficing. 
The  South,  on  the  other  hand,  stood  practically  alone  in  sec- 
tional isolation.  Cut  off  by  her  ''peculiar  institution"  from 
normal  economic  relations  with  the  rest  of  the  country,  she 
had  no  share  in  its  growth,  but  stood  apart  until  war  broke 
down  the  barriers  and  opened  the  way  for  her  natural  develop- 
ment . 

230.  Summary:  Material  development.  —  The  system  of 
protection  lo  manufacturing  indu.-trie.s  wan  earh'  adopted  as  a 
conscious  policy  by  the  American  people,  especially  after  the 
p]nibargo  and  the  War  of  1812  had  forced  them  to  begin  manu- 
facturing for  themselves.  As  the  South,  condemned  by  the 
inefficiency  of  slave  labor  to  a  primitive  agriculture,  could  not 
hope  to  develop  manufactures  for  herself,  she  naturally  ob- 
jected to  paying  higher  prices  to  help  northern  manufacturers. 
Thus  the  tariff  first  brought  to  a  point  the  sectional  differences, 
which  were  later  to  become  so  serious,  between  the  slave  and 
the  free  States. 

As  yet,  however,  the  country  was  too  new  and  undeveloped 
to  permit  the  growth  of  a  purely  industrial  state;  the  westward 
movement  was  the  indication  of  a  national  impulse  to  appro- 
priate and  exploit  the  wealth  of  a  virgin  soil.  The  purchase 
of  Louisiana  Territory  gave  a  definite  aim  to  this  movement, 
although  it  did  not  initiate  it.  Hand  in  hand  with  the  settle- 
ment of  the  western  lands  went  the  improvement  of  the  means 
of  transportation.  So  important  was  this  that  both  Federal 
and  State  governments  lent  their  aid  to  building  turnpikes  and 
canals,  but.  after  some  rather  disastrous  experiences  with  these, 
left  to  private  corporations  the  task  of  providing  the  country 
with  railroads.     Protection  to   American   industries   and   the 


264       ECONOMIC    HISTORY    OF    Till':    UMTh'J)    S7 ATKS 

development  of  internal  itnpj-oxenients  were  the  two  parts  of 
the  ''  American  System,"  which  engaged  the  energies  of  tlu; 
nation  during  this  period.  Capital  and  enterprise  began  to 
be  diverted  from  foreign  trade  to  internal  development,  and 
the  first  stage  in  the  decline  of  tlie  ocean  merchant  marine 
commenced.  On  the  w^hole,  it  was  a  period  of  extraordinary 
material  development,  in  w'hich  the  exploitation  of  its  natural 
resources  became  the  definite  aim  of  the  people  of  the  United 
States. 

SUGCIEHTIVE  TOPICS  AND  QUESTIONS.     CHAPTER  XIX 

1.  What  difference.s  were  there  hetween  slavery  in  the  ancient  world 
and  in  the  United  States?  [Palgrave,  Diet,  of  Pol.  Ju-on.,  art.  Slavery; 
Encycl.] 

2.  What  was  the  "black  belt"?  [Brown,  Lower  So.  in  Amer.  Hist., 
25.] 

3.  What  i)roof  or  illustrations  can  you  give  to  sliow  that  the  incfli- 
cient  methods  of  the  masters  were  responsible  for  the  industrial  back- 
wardness of  the  South?     [Ingle,  56-58;  Olmsted,  all  books.] 

4.  Mules  were  generally  used  on  southern  plantations  instead  of 
horses;  why?     [Olmsted,  Seaboard  Slave  States,  47.] 

5.  What  effect  did  the  existence  of  slavery  have  upon  the  education 
of  southern  white  children?     [Rhodes,  Hist,  of  the  U.  S.,  I,  343.] 

6.  What  effect  did  the  institution  of  slavery  have  upon  the  attitude 
of  the  South  to  the  (juestions  of  (a)  protection  and  tariff",  (6)  internal 
improvements?     [McMaster,  V.  170.] 

7.  What  effect  upon  their  attitude  to  the  annexation  of  Texas,  and 
the  war  with  Mexico?  [Hammond,  55-^8;  Ingle,  chap.  9;  Brown,  Lower 
So.,  83-112.] 

8.  Was  there  any  internal  migration  of  free  whites  from  the  southern 
States  to  other  States?  To  which,  and  why?  [Eighth  Census  (1860j, 
vol.  Pop.,  33-34.] 

9.  What  proportion  of  the  total  exports  and  imports  respectively 
belonged  to  the  South?  Did  this  involve  a  loss  to  the  South?  [Cloodloe, 
117;  De  Bow%  Wealth  and  Resources  of  the  South  and  AVest.] 

10.  What  w^ere  some  of  the  non-agricultural  industries  of  the  South, 
and  how  far  were  they  developed?  [Ingle,  chap,  3;  Coman,  249-254;  De 
Bow,  passim.] 

11.  Trace  the  development  of  manufactures  in  .some  typical  southern 
State  up  to  1860.     [Eighth  Census  (1860),  vol.  Man.,  11-14;  Ingle,  chap.  3.] 

12.  What  proportion  of  the  food,   clothing,  etc.,  consumed  in  the 


SLAVERY   AXD    THE  SOUTH  265 

South  was  raised  there?     [Ingle,  64;  Peto,  308;  Eighth  Census  (1860), 
Manuf.,  67;  De  Bow.  III.  19.5-207,  28.5-299.] 

13.  What  was  the  proportion  of  large  and  small  farms  in  the  North 
and  South?     [Seaman,  II,  572;  Eighth  Census  (1860),  vol.  Agric,  221.] 

14.  How  much  capital  was  invested  in  slaves  in  1860?  If  slavery 
had  never  existed,  how  would  this  wealth  probably  have  l^een  invested? 
Would  the  South  have  l^een  tetter  off? 

15.  How  did  the  growth  of  cities  in  the  South  compare  with  those  of 
the  North?     [Twelfth  Census  (1900),  I,  24-25.] 

16.  What  was  the  development  of  railroads  in  the  South?  [Ingle, 
99;  Coman.  2.52;  De  Bow.  II,  4.3.5-4.54.] 

17.  Was  the  movement  toward  emancipation  .so  strong  before  1860 
as  to  lead  you  to  believe  that  the  slaves  would  have  l)een  voluntarily  freed 
in  a  short  time?  [Brown,  Lower  So.,  .50-83;  Coman,  2.56-258;  De  Bow,  II, 
262-292;  Olmsted,  Seaboard  Slave  States,  125-133,  633-637;  Eighth 
Census  (1860),  vol.  Pop.,  1.5-16.] 

18.  Describe  the  effects  of  serfdom  and  the  emancipation  of  the  serfs  in 
Russia.  [Johnson.  Great  Events. XVH,  .3.53-378;  Hourwich,The  Economics 
of  the  Russian  Village,  in  Columbia  Studies  in  Hist.,  Econ.,  and  Pub. 
Law.  II,  no.  1;  Stone,  Capitalism  on  Trial  in  Russia,  in  Polit.  Sci.  Quart., 
XIII,  91;  Leroy-Beaulieu,  The  Empire  of  the  Tsars  and  the  Russians,  I. 
40.3-473,  50.5-579;  Simkhovitch,  The  Russian  Peasant  and  Autocracy,  in 
Polit.  Sci.  Quart.,  XXI,  569-595. 

SELECTED   REFERENCES.     CHAPTER  XIX 

**Caimes:  The  Slave  Power,  chaps.  2-5. 
**Hart :  Slaverj^  and  Abolition. 
**Helper:  The  Impending  Crisis. 
*  Ingle:  Southern  Side-lights,  chaps.  2-4,  8. 

**01msted:  Seaboard  Slave  States,  chaps.  3,  4,  8;  also  the  Cotton  King- 
dom, A  Journey  in  the  Back  Countrj'^,  and  Texas  Journey. 

* Pro-slaven,^  argument  [a  symposium]. 

*Rhodes:  Histon.^  of  the  United  States,  I,  chaps.  1,  2,  4. 
*TiUinghast:  The  Negro  in  Africa  and  America. 

Brown:  The  Lower  South  in  American  History,  9-45. 
Collins:  The  Domestic  Slave-trade  in  the  United  States. 
Hammond:  The  Cotton  Industr^^  chaps.  2,  3. 
Peto:  Resources  and  Prospects  of  the  I'nited  States,  296-316. 
Philhps:  The  Economic  Cost  of  Slave-holding,  in  Pohtical  Science  Quar- 
terly, XX.  237-275. 
Pollard:  The  Lost  Cause,  chaps.  1-4. 


PART   IV 

ECONOMIC    INTEGRATION    AND    INDUSTRIAL 
ORGANIZATION  (1860-1906) 

CHAPTER   XX  Y  I  y"^ 

THE  PRODUCTION  AND  EXPORT  OF  FOOD  AND  RAW 
MATERIALS  (1860-1880) 

231.  Effect  of  the  Civil  War.  —  The  period  from  1860  to 
1880  is  characterized  by  the  entrance  of  the  United  States  into 
the  world's  markets  as  the  chief  source  of  supply  of  food  prod- 
ucts and  of  raw  materials  for  Europe.  By  the  end  of  that  time 
the  United  States  assumed  the  leading  place  as  a  producer  and 
exporter  of  breadstuffs  and  grains,  as  she  had  already  of 
^  cotton  and  tobacco.  The  Civil  War  affected  the  agricultural 
development  of  the  country  both  directly  and  indirectly.  As 
a  result  of  the  war  demand  for  agricultural  products,  prices 
rose  rapidly  and  production  was  greatly  stimulated.  At  the 
same  time  the  organization  of  great  armies  withdrew  thousands 
of  men  from  the  farms  and  diminished  the  labor  supply,  a  loss 
which  was  but  partially  made  up  by  the  immigration  from 
Europe.  One  result  of  the  scarcity  of  labor  was  the  applica- 
tion to  agriculture  on  an  unprecedented  scale  of  labor-saving 
machinery.  It  has  even  been  asserted  that  the  issue  of  the 
Civil  War  was  decided  b}^  the  invention  of  the  reaper.  The 
ultimate  victory  of  the  North  was  no  doubt  largely  due  to 
5the  fact  that  during  the  war  the  gathering  of  the  harvests  and 
the  development  of  the  Northwest  proceeded  uninterruptedly. 
For  instance,  the  wheat  production  of  Indiana  increased  from 
15,000,000  bushels  in  1859  to  20,000,000  in  1863,  ahhough  one 
tenth  of  her  male  population  were  in  the  army.  In  1865  it 
was  estimated  that  there  were  not  less  than  250,000  reapers  in 
use  in  the  United  States,  each  of  which  would  cut  an  average 

266 


PRODUCTION    AND    EXPORT    OF    FOOD  267 

of  ten  acres  in  a  day  of  twelve  hours.  On  the  other  hand,  the 
greatest  blow  struck  the  South  was  the  establishment  of  a 
naval  blockade  which  prevented  the  marketing  of  her  great 
staple,  cotton. 

232.  Growth  of  the  grain  States.  —  The  population  of  the 
grain  States  (i.e.,  the  North  Central  division)  increased  during 
the  decade  1860-70  by  more  than  42  per  cent.,  and  in  the  next 
decade  by  nearly  34  per  cent.;  this  represented  an  addition  to 
the  population  in  tw^enty  years  of  over  eight  million  inhabitants. 
The  opening  of  new  land  to  settlement  stimulated  immigration 
to  such  an  extent  that  2,500,000  persons  came  to  the  United 
States  during  the  decade  1860-70,  to  be  followed  in  the  next 
ten  years  by  3,000,000  more,  a  large  proportion  of  whom 
settled  in  the  middle  West.  The  greatest  growth  took  place 
in  the  newer  States  of  the  Northwest,  although  even  in  the  older 
States,  like  Illinois,  Iowa,  and  Missouri,  the  increase  was  more 
rapid  than  the  general  rate.  In  the  single  decade  1870-80 
over  297,000  square  miles,  or  a  territory  equal  in  extent  to 
Great  Britain  and  France  combined,  were  added  to  the  cul- 
tivated area  of  the  United  States.  Such  a  development  was 
made  possible  by  the  extension  of  the  railroad  system  in  the 
grain  region,  which  opened  up  new  areas  for  cultivation  and 
made  it  possible  to  market  the  product  speedily  and  econom- 
ically. A  powerful  influence  leading  to  the  settlement  of  the 
spring  wheat  section  of  the  Northwest  was  exerted  by  the 
introduction  in  the  early  seventies  of  the  "  new  process  "  of 
reducing  wheat  to  flour.  Iron  and  porcelain  rollers  replaced 
the  old  millstones,  the  grain  being  run  through  half  a  dozen 
sets  of  rollers.  Whereas  previously  the  flour  made  from  spring 
wheat  had  been  of  inferior  grade,  it  was  now  rendered  superior 
to  that  made  from  winter  wheat;  consequently  the  price  of 
spring  wheat  advanced  and  greatly  stimulated  the  wheat- 
raising  industry  of  that  section.  Between  1870  and  1880  the 
population  of  Minnesota  and  the  Dakotas,  where  it  was  chiefly 
grown,  increased  from  453.887  to  915,950. 

233.  The  Homestead  Act.  —  The  passage  of  the  Homestead 


268       ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

y  Act  in  1862  made  easy  and  profitable  the  acquisition  of  a  farm 
home,  especially  for  those  with  little  capital.  The  funda- 
mental principle  of  the  act  was  the  grant  of  a  free  homestead 
to  the  actual  settler;  after  five  years'  residence  the  title  passed, 
without  charge,  to  the  ''  homesteader."  As  a  result  of  this 
law  thousands  of  people  took  up  the  free  land  of  the  middle 
West,  over  sixty-five  million  acres  being  given  away  to  indi- 
viduals during  the  twenty-year  period  1860-80.  This  act  was 
ithe  logical  outcome  of  the  pre-emption  system  and  has  since 
I  been  the  accepted  policy  of  the  government  in  disposing  of  the 
public  lands.  So  rapid  was  the  settlement  of  the  free  land  that 
by  1880  the  ''  frontier  "  had  entirely  disappeared  and  there 
was  practically  continuous  settlement  from  ocean  to  ocean. 
Of  the  Homestead  Act  the  Public  Land  Commission  said:  ''  It 

^\  protects  the  government,  it  fills  the  States  with  homes,  it 
i  builds  up  communities,  and  lessens  the  chances  of  social  and 
civil  disorder  by  giving  ownership  of  the  soil,  in  small  tracts, 
to  the  occupants  thereof.  It  was  copied  from  no  other  nation's 
system.  It  was  originally  and  distinctly  American,  and 
remains  a  monument  to  its  originators." 

234.  Production  of  cereals.  —  The  increase  in  the  number 
of  farms,  from  2,044,077  in  1860  to  4,008,907  in  1880,  with  an 
accompanying  increase  of  over  120,000,000  acres  of  improved 
farm  land,  was  attended  by  a  great  expansion  of  production. 
Although  the  improved  land  in  1880  was  but  15  per  cent, 
of  the  total  area,  it  produced,  according  to  Mulhall,  30  per 
cent,  of  the  grain  of  the  world  —  a  fact  pregnant  with  pos- 
sibilities for  the  future.  The  increase  in  the  production  of  the 
six  principal  cereals  during  this  period  may  be  seen  in  the 
following  table: 


Production  of  Cereals,   1860-1880  (i> 

-  bushels) 

Year 

Indian  corn 

Wheat 

Oats 

Barley 

Rye      Buckwheat 

I860 
1880 

838,792,742 
1,754,861,535 

173,104,924 
459,479,505 

172,643,185 
407,858,999 

15,825,898    15,540,605';    17,571,818 
44,113,495    19,831,595  \    11,817,327 

PRODUCTION    AND    EXPORT    OF    FOOD 


269 


The  tendency,  already  noticed,  is  observeable  here  of  con- 
centrating the  attention  on  certain  great  staples:  wheat  and 
corn  in  the  North  far  outstripped  all  others  in  importance; 
while  in  the  South  the  same  thing  was  true  of  cotton  and  to- 
bacco. The  production  of  a  few  staples  on  a  large  scale  made 
possible  the  application  of  machinery  and  the  introduction  of 
factory  methods  which  already  were  beginning  to  be  charac- 
teristic   of   American    agriculture.     In    New    England,    which 


j^«t. 


^ .  j^  ^ 


Harvesting  with  Cradles 
In  various  parts  of  the  country,  especially  the  South,  the  primitive 
method  of  harvesting  with  the  cradle-scythe,  or  the  scythe  alone, 
is  still  largely  followed.     On  small  farms  or  in  a  rough  country 
this  is  necessary. 

now  felt  severely  the  competition  of  the  fresh  wheat  lands  of 
the  West,  resort  was  had  to  a  more  intensive  cultivation.  The 
transition  to  a  careful  system  of  small  farming  was  practically 
accomplished  in  the  eastern  States  during  this  period. 

235.  Agricultural  machinery.  —  The  application  of  ma- 
chinery to  agriculture,  which  had  begun  before  the  war,  was 
now  made  on  a  still  more  extensive  scale,  the  value  of  farming 
implements   and   machinery  increasing  from  $246,000,000  in 


270      ECONOMIC    HISTORY    OF    THE    UNITED   STATES 

1860  to  $406,000,000  in  1880.  It  was  estimated  in  1880  that 
over  10,000  patents  had  been  granted  in  this  country  up  to 
that  time  for  implements  and  machines  connected  directly 
with  the  cultivation,  preparation,  and  handling  of  grain.  Of 
these  the  most  important  were  the  threshers  (first  driven  b}" 
horse  power  and  then  by  steam),  the  reapers,  and  finalh^  the 
complete  harvester.  By  means  of  these  improved  agricultural 
machines  the  average  amount  of  grain  that  could  be  har- 
vested, threshed,  and  prepared  for  the  market,  from  the  stand- 
ing grain  to  the  marketable  product,  by  a  single  man  per  day, 
was  increased  from  about  4  bushels  in  1830  to  about  50  bushels 
in  1880.  A  few  years  later  Mr.  D.  A.  Wells  estimated  that  the 
labor  of  three  to  four  men  on  the  great  wheat  fields  of  Dakota 
would  annually  produce,  convert  into  flour,  and  transport  to 
the  seaboard  one  thousand  barrels  of  flour,  or  enough  for  the 
yearly  consumption  of  one  thousand  persons.  The  effect  on 
the  production  of  wheat  is  seen  in  the  growth  of  the  per  capita 
production  for  the  United  States  from  5.6  bushels  in  1860  to 
9.2  bushels  in  1880.  At  the  same  time  the  cost  of  wheat  bread 
to  the  consumer  was  greatly  cheapened. 

Hardly  less  important  than  the  invention  of  agricultural 
machinery  were  the  improvements  in  the  methods  of  trans- 
porting and  handling  the  grain.  As  long  as  it  remained  in  the 
farmer's  hands  the  grain  was  carried  entirely  by  hand  in  bags 
or  sacks  and  was  moved  by  teams.  After  it  left  the  farm  it  was 
handled  and  carried  in  bulk  by  steam  power.  A  system  of 
grading  and  classification  was  established  by  which  all  specific 
lots  of  a  certain  grade  were  dealt  with  together  in  bulk,  in  the 
most  economical  manner.  The  use  of  elevators  for  transfer- 
ring or  storing  grain  made  it  possible  to  unload  and  elevate  the 
grain,  in  the  best  establishments,  at  the  rate  of  a  carload  a 
minute;  vessels  were  loaded  at  the  rate  of  8,000  to  10,000 
bushels  an  hour.  The  use  of  such  unique  methods  alone  made 
it  possible  to  dispose  of  the  growing  grain  trade  of  the 
country. 

236.    Growth  of  the  international  grain  trade.  —  One  result 


PRODUCTION    AND    EXPORT    OF    FOOD 


271 


of  the  great  movement  of  grain  by  steam  was  the  better  dis- 
tribution of  the  world's  grain  supply.  Before  that  a  short 
crop  in  any  country  meant  dear  bread  in  that  place,  if  not 
famine,  but  now  the  shortage  of  one  country  was  quickly  made 
up  by  the  surplus  of  another.  The  exportation  of  breadstuffs 
by  the  United  States  did  not  begin  on  a  large  scale  until  after 


:^   jj 

-K  ^^H 

^^^^ 

^•^^^i^ 

1 

1 

^^m 

Copyright,  1900,  by  Detroit  Publishing  Co. 

Great  Xortherx  Elevator  and  Shippixg,  Buffalo,  X.  Y. 
Elevators  are  used  for  storing  grain  until  it  is  wanted  for  use.  The 
larger  modern  elevators  consist  of  huge  steel  tanks  or  bins,  capable  of 
holding  500.000  to  1 ,000,000  bushels.  They  are  usually  built  by  the 
water  and  with  rail  connections,  as  shown  al)ove,  so  that  the  grain 
may  be  shipped  either  by  water  or  rail.  The  vessel  at  the  extreme 
left  in  the  foreground  is  a  whaleback,  a  fast-disappearing  type  on 
the  Great  Lakes. 

1860,  ])ut  during  the  Civil  War  the  exports  increased  enor- 
mously, partly  owing  to  the  fact  that  the  cutting  off  of  the 
market  in  the  southern  States  threw  a  large  surplus  into  the 
channels  of  foreign  trade.  The  following  decade  disclosed  an 
even  more  astonishing  growth.  As  the  increase  in  cereal  pro- 
duction was  twice  as  rapid  as  the  growth  of  population,  a  large 


272      ECONOMIC   HISTORY    OF    THE    UNITED   STATES 

exportable  surplus  was  grown  each  year.  The  exports  of  wheat 
and  corn  —  the  only  two  cereals  sent  abroad  to  any  extent  — 
are  shown  in  the  followinor  table: 


Chief  Exports  of  Cereals.     Aggregate  for  Ten  Years  Ending 


Year 

Wheat 

(bushels) 

Wheat  Flour 

(barrels) 

Indian  Corn 
(bushels) 

Corn  Meal 
(barrels) 

1860... 
1870... 
1880... 

51,709,036 
187,686,309 
550,767,121 

27,701,638 
30,360,781 
37,117,241 

54,784,029 
102,527,365 
439,656,935 

2,438,531 

2,578,247 
3,422,376 

One  interesting  change  took  place  in  the  exports  of  wheat 
—  whereas  in  1830  flour  constituted  99  per  cent,  of  the  total 
wheat  exported,  by  1880  it  had  fallen  to  less  than  25  per  cent. 
This  change  was  due  largely  to  the  protection  given  by  various 
European  countries  to  the  milling  interest.  As  a  result  most  of 
the  American  flour  still  exported  went  to  the  West  Indies  and 
to  the  South  American  countries.  The  United  States  was 
already  the  most  important  wheat -exporting  coiuitr}^  in  the 
world,  supplying  about  half  the  needs  of  wheat -importing 
nations.  Russia,  Austro-Hungary,  and  Turkey  were  the  other 
most  important  wheat -growing  countries,  while  Great  Britain. 
Switzerland,  Italy,  and  Belgium  w^re  our  best  customers. 
Of  Indian  corn  only  5  per  cent,  of  the  total  crop  was  exported, 
the  rest  l^eing  used  chiefly  as  a  feed  crop  at  home. 

237.  Failure  of  the  plantation  system  in  the  South.  —  Under 
the  system  of  slavery  a  large  part  of  the  capital  of  Southern 
planters  which  would  otherwise  have  taken  the  form  of  im- 
proved lands,  buildings,  and  machinery  had  been  invested  in 
slaves.  The  3,953,760  slaves  in  the  South  in  1860  were  valued 
at  $2,000,000,000;  in  the  planting  States  this  form  of  property 
greatly  exceeded  all  others,  both  real  and  personal.  The  Civil 
War  not  only  swept  away  this  form  of  property,  but  resulted 
in  the  destruction  of  buildings,  tools,  cattle,  and  other  capital. 
The  high  price  of  cotton,  however  —  43  cents  a  pound  in  1865 


PRODUCTION    AND    EXPORT    OF    FOOD  273 

and  30  cents  in  1866  —  encouraged  the  planters  to  revive  its 
production.  ]\Iany  borrowed  the  necessary  capital,  thus  intro- 
ducing on  a  large  scale  the  system  of  agricultural  credit  which 
has  since  been  so  characteristic  of  southern  agriculture,  and 
proceeded  to  raise  cotton  with  hired  labor.  This  had  two 
unfortunate  results:  in  the  first  place,  there  was  an  over- 
production of  cotton,  causing  a  rapid  fall  in  the  price;  in  the 
second  place,  it  led  to  a  return  to  the  old  one-crop  plantation 
system,  with  its  concentration  on  cotton.  The  wage  system 
which  was  thus  inaugurated  was  found  to  be  utterly  unsatisfac- 
tory, as  the  freedmen  were  quite  irresponsible.  The  character 
of  the  labor  and  the  falling  price  of  cotton,  in  addition  to  the 
burden  of  overtaxation  under  the  carpet-bag  governments, 
caused  the  ruin  of  many  planters,  and  vast  areas  of  land  went 
out  of  cultivation.  "  Plantations  that  had  brought  from 
$100,000  to  $150,000  before  the  war  and  even  since,  were 
sold  at  $6,000  or  $10,000  or  hung  on  the  hands  of  the  planter 
and  his  factor  at  any  price.  The  ruin  seemed  to  be  universal 
and  complete,  and  the  old  plantation  system,  it  then  seemed, 
had  perished  utterly  and  forever."  ^  The  total  value  of  farm- 
ing lands  in  the  South  declined  over  48  per  cent,  between  1860 
and  1870. 

238.  The  era  of  small  farms.  —  An  era  of  small  farms  fol- 
lowed the  failure  of  the  large  plantation  system  under  free 
labor,  and  the  large  land  holdings  were  broken  up  to  suit  small 
purchasers.  Many  of  the  "  poor  whites,"  and  not  a  few  negroes 
purchased  farms  of  ten  to  twelve  acres,  and  proceeded  to  raise 
cotton  on  their  own  account.  In  Mississippi,  for  example, 
there  were  but  412  farms  of  less  than  10  acres  in  1867,  and 
10,003  in  1870;  the  number  of  small  farms  of  less  than  100 
acres  increased  55  per  cent,  in  the  South  during  the  decade 
1860-70,  while  the  average  size  of  farms  decreased  from  401.7 
acres  to  229.8  acres.  Nearly ^4Q^pei^cent.  of  the  laborers  en- 
gaged in  the  cultivation  of  cotton  by  1876  were  w^hites,  as 
against  about  jl  per  cent,  before  the  war.  In  fact,  it  was 
1  H.  W.  Grady,  in  Harper's  Magazine,  53:  721. 
19 


274      ECONOMIC    HISTORY    OF    THE    UNITED   STATES 

mainly  the  "  poor  whites  "  who  took  over  the  land  relinquished 
by  the  large  ''  ante-bellum  "  planters  and  began  the  process 
of  regenerating  the  South.     Most  of  the  land  was  not  bought 


A  Modern  Cotton  Cin 
Gill  houses  are  built  nowadays  at  railroad  centers,  whei-e  the  ginning  for  the  neigl 
horhood  is  done.  A  modern  establishment  contains,  in  addition  to  the  steam  rolle 
gin,  which  separates  the  fiber  from  the  seed,  various  other  devices  designed  to  car 
for  the  seeds  and  lint  after  separation.  But  the  essential  elements  of  Whitney 
original  gin  still  remain,  though  magnified  many  times  over. 

outright  by  the  small  farmer,  however,  but  was  worked  on 
shares;  the  system  of  cash  rents  was  never  wide-spread.  Under 
these  systems  the  methods  of  production  were  gradually 
improved,    fertilizers    and    improved    machinery    were    more 


PRODUCTION    AND   EXPORT   OF   FOOD  275 

generally  used,  and  the  average  yield  of  cotton  per  acre  increased 
from  172  pounds  in  1860  to  222  in  1870.  The  total  yield  of 
2.275,372,000  pounds  in  1860,  the  last  uninterrrupted  year  of 
production  under  slavery,  was,  however,  not  equaled  until 
1879,  when  the  product  was  2,404,410,000  pounds.  On  the 
other  hand,  there  was  some  slight  diversification  of  crops. 
Whereas  in.  1860  cotton  occupied  44  per  cent,  of  the  tillable 
area  of  the  cotton  States,  Indian  corn  38  per  cent.,  and  other 
crops  18  per  cent.;  in  1876  only  35  per  cent,  was  given  over  to 
cotton,  41  per  cent,  to  corn,  and  24  per  cent,  to  other  crops. 

239.  The  system  of  agricultural  credit.  —  Although  the 
method  of  advancing  money  and  supplies  on  growing  crops 
was  practised  in  the  South  before  the  war,  the  necessities  of 
planters  after  that  event  made  its  use  characteristic  of  southern 
agriculture.  Cotton  factors  advanced  the  capital  necessary 
to  revive  the  production  of  this  staple,  themselves  often  bor- 
rowing from  commission  houses,  and  taking  a  crop  lien  on  the 
growing  crop  of  the  planter.  When  falling  prices  resulted  in 
the  l)reaking  up  of  the  plantation  system  and  the  rise  of  a  small 
tenant  and  freehold  farming  class,  the  system  was  extended. 
The  lender  was  now,  however,  the  merchant  and  country  store- 
keeper, who  was  i^ersonally  familiar  with  the  small  borrower 
and  who  could,  moreover,  exercise  constant  supervision  over 
the  crop.  While  economically  necessary  at  first  as  a  means  of 
securing  the  needed  capital,  this  practice  of  agricultural  credit 
soon  resulted  in  a  system  of  peonage  of  the  debtor  farmer  to 
the  merchant  who  became  his  creditor,  under  which  the  delator 
was  kept  almost  in  a  state  of  serfdom,  working  for  his  creditor 
until  his  debts  were  paid.  All  supplies  must  be  purchased 
through  the  creditor,  and  the  crops  must  be  sold  through  him, 
on  both  of  which  transactions  lucrative  commissions  were 
charged  in  addition  to  frequently  usurious  rates  of  interest. 

240.  Other  agricultural  products.  —  Next  to  cotton,  tobacco 
is  the  most  important  staple  of  the  South,  although  between 
1860  and  1880  the  production  remained  almost  stationary. 
About    half —  215,000,000    pounds    in    1880  —  was    exported, 


276      ECONOMIC   HISTORY    OF    THE    UNITED   STATES 

most  of  it  going  to  Germany,  Great  Britain,  and  France.  The 
bulk  of  the  product  was  quite  localized,  Kentucky,  Virginia, 
and  Maryland  producing  60  per  cent.  The  production  of  cane 
sugar,  which  was  raised  almost  exclusively  in  Louisiana,  de- 
clined 22  per  cent,  between  1860  and  1880.  Rice,  like  cane 
sugar,  was  confined  to  a  narrow  geographical  range,  almost 
one  half  being  raised  in  South  Carolina;  its  culture  also  showed 
a  considerable  falling  off.  The  production  of  none  of  these 
articles  was  sufficient  for  home  consumption,  and  illustrates 
again  the  increasing  concentration  of  the  South  on  cotton. 
The  grass  crop  was  the  greatest  of  all  crops  of  the  country,  the 
amount  of  hay  harvested,  in  addition  to  that  consumed  in 
grazing,  almost  doubling  between  1860  and  1880.  There  was 
also  a  very  noticeable  increase  during  this  period  in  garden 
and  orchard  products,  especially  in  the  southern  and  some  of 
the  western  States,  owing  to  the  wide  extension  of  fruit  culture 
in  those  regions.  The  following  table  presents  the  figures  for 
most  of  these  products: 


Agricultural  Products,   1860-1880 


Product 

1860 

1880 

Tobacco    Dounds 

434,209,461 

230,982,000 

187,167,032 

19,083,896 

472,661,157 
178,872,000 
110,131,373 
35,150,711 
202,837,231 
$50,876,154 
$21,761,250 
243,157  850 

Rice   pounds  . 

Hay   tons 

Orchard  products,  value    

Cheese,  pounds 

Butter   nonnds 

806,672,071 

241.  Live  stock  and  dairy  products.  —  Except  in  the  case  of 
horses  the  rate  of  increase  of  live  stock  on  farms  did  not  keep 
pace  with  the  growth  of  population.  There  were,  however,  vast 
herds  of  cattle,  sheep,  and  swine  on  the  ranges  of  the  West 
which  were  not  enumerated  in  the  census.     According;  to  that 


PRODUCTION    AND    EXPORT    OF    FOOD 


177 


publication  there  were  on  the  average  for  every  family  in  the 
country  a  horse,  a  cow,  four  pigs,  and  three  sheep.  The  process 
of  converting  this  live  stock  into  food  for  human  consumption 
began  its  wonderful  growth  dur- 
ing this  period.  The  invention 
of  the  refrigerator  car,  the  first 
shipment  by  which  from  Chi- 
cago to  New  York  took  place  in 

1869,  gave  a  wonderful  impetus 
to  the  slaughtering  and  meat- 
packing industry.  Pork-pack- 
ing, which  had  been  mainly  done 
in  the  winter  up  to  this  time,  was 
now  possible  during  the  sum- 
mer; the  number  of  hogs  killed 
grew  from  992,310  in  1860  to 
11,001,699  in  1880.  The  dressed 
beef  trade,  too,  was  given  a 
stimulus  by  the  introduction  of 
the  refrigerating  process.  The 
export  of  fresh  beef  dates  from 
1876,  though  the  exportation  of 
live  cattle  had  already  begun  in 

1870.  The  total  value  of  the 
products  in  the  slaughtering  and 
meat-packing  industries  grew 
enormously,  from  $29,441,776 
in  1860  to  $303,562,413  in  1880. 

The  dairy  industry  was  also 
revolutionized  by  the  introduc- 
tion of  factory  methods  in  the 
making  of  cheese,  although  a 
beginning  had  been  made  in  the  fifties.  By  1880  more  than 
four  fifths  of  the  cheese  produced  in  the  United  States  was 
made  in  factories.  On  the  other  hand,  as  late  as  1870  the 
common  form  of  churn  in  use  for  butter  making  was  aptly 


The 


Cream  Separator 
invention   of  the  centrifugal 


machine  for  separating  cream  from 
milk,  by  reducing  the  cost,  gave  a 
great  impetus  to  butter  making. 
In  such  a  machine  the  cream  is 
separated  from  the  milk  by  centrif- 
ugal force  — the  heavier  milk  be- 
ing thrown  outward  from  a  rapidly 
revolving  cylinder  while  the  cream 
remains  at  the  center.  In  a  butter 
or  cheese  factory  the  separators 
and  churns  are  driven  by  steam; 
the  old  processes  of  "  setting  "  and 
"skimming"  and  of  churning  by 
hand  have  given  place  to  factory 
methods. 


278      ECONOMIC    HISTORY    OF    THE    UNITED   STATES 

described  by  a  child's  riddle:  '^  Big  at  the  bottom,  and  small  at 
the  top,  a  thing  in  the  middle  goes  flippety-flop."  By  1880 
only  three  and  one  half  per  cent,  of  all  the  butter  produced  was 
as  yet  made  in  factories.  Over  500  million  gallons  of  milk  was 
used  for  these  purposes  in  addition  to  over  200  million  gallons 


Power  Churn  and  Butter  Mixer 
Butter  is  made  by  separating  the  butter  fat  in  cream  form  from  the 
milk  serum  by  the  process  of  churning,  which  consists  in  agitating 
the  cream.  In  the  old-fashioned  dash  churn  the  motion  was  largely 
one  of  stirring,  but  the  modern  churn  as  shown  in  the  picture  secures 
the  result  by  means  of  the  concussion  of  the  pai'ticles  upon  the  sides 
of  the  revolving  or  moving  vessel.  At  the  right  of  the  churn  is  the 
butter  mixer,  a  revolving  table  with  fluted  power  roller  under  which 
the  butter  is  brought  by  the  revolutions  of  the  table.  The  mixer 
works  out  the  butter-milk,  a  process  which  was  formerly  done  by  hand. 

sold  otherwise.  The  statistics  of  poultry  and  eggs  were  gath- 
ered for  the  first  time  by  the  census  of  1880,  and  showed  a 
total  of  125,507,322  fowl  in  the  country;  for  the  year  1880  they 
produced  456,910,916  dozens  of  eggs,  which  were  valued  at 
$55,000,000,  a  sum  more  than  equal  to  the  interest  on  the 
national  debt  at  that  time.     The  aggregate  value  of  all  farm 


PRODUCTION    AND    EXPORT    OF    FOOD  279 

products  in  1880  was  $2,212,540,927,  which  was  hirger  than 
that  of  any  other  nation  in  the  world. 

242.  Farm  area  and  ownership.  —  The  enormous  increase 
in  the  number  of  farms  during  the  period  1860-80  —  from 
2,044,077  to  4,008,907  —  resulted  partly  from  the  inclusion  of  < — ^ 
new  lands  and  partly  from  the  subdivision  of  existing  farms. 
The  former  was  true  principally  of  the  West;  the  latter,  of  the 
South.  The  total  land  in  farms  did  not  increase  nearly  as 
rapidly  — from  407.000,000  to  536.000,000  acres  —  and  con- 
sequently the  average  size  of  farms  declined  from  199  acres  in 
1860  to  134  acres  in  1880,  while  the  percentage  of  improved 
area  in  farms  increased  from  43  per  cent. to  53  per  cent.,  showing 

a  growth  of  more  intensive  small-scale  farming  and  a  fuller  use 
of  the  land.  In  the  census  of  1880  statistics  were  gathered  for 
the  first  time  to  show  the  tenure  of  land  in  the  United  States, 
when  it  was  disclosed  that  74  per  cent,  of  the  farms  were  cul-  U-- 
tivated  by  their  owners,  while  18  per  cent,  were  cultivated  by 
tenants  paying  a  share  of  the  product  as  rent,  and  8  per  cent, 
by  tenants  who  paid  a  fixed  money  rental.  The  system  of 
ownership  was  most  general  in  the  North  and  West,  while  in 
the  South,  from  causes  already  indicated,  the  practice  of 
tenant  farming  was  more  prevalent,  over  one  third  of  the 
farms  in  that  section  being  rented.  More  than  one  half  of 
the  farms  rented  were  under  fifty  acres;  on  the  other  hand, 
almost  three  fourths  of  the  farms  cultivated  by  their  owners 
were  over  fifty  acres.  These  facts  seemed  to  indicate  a 
desire  to  operate  a  farm  on  his  own  account  even  on  the  part 
of  the  man  without  means  to  purchase  the  same  outright. 
The  value  of  farms  in  the  United  States,  with  improve- 
ments, increased  from  $6,645,045,007  to  $10,197,096,776.  or 
from  $16  to  $19  average  value  per  acre  in  this  twenty-year 
period. 

243.  Forest  products.  —  The  consumption  of  forest   prod- 
ucts has  always  been  carried  on  most  lavishly  in  the  United 
States,  and  after  the  Civil  War  the  demand  for  lumber  for    U 
railroad   building   and   other   purposes   greatly   increased.     In 


280      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

the  census  of  1870  for  the  first  time  a  canvass  was  made  of  our 
forest  resources,  and  the  relatively  small  area  of  forest  became 
known.  Increasing  interest  began  to  be  manifested,  and  laws  for 
the  encouragement  of  timber  planting  were  passed  by  most  of 
the  western  States  in  the  seventies.  Congress  in  1873  joined 
in  this  kind  of  legislation  by  the  passage  of  the  timber  culture 


Pulp  Mill 
Paper  can  I^e  made  from  any  vegetable  fibers,  the  best  qualities 
being  made  of  rags,  and  the  cheaper  grades  of  hemp  and  jute,  or  of 
wood.  On  the  right  of  this  mill  may  be  seen  the  grinders,  which 
macerate  the  wood,  and  on  the  left  the  screens  where  the  matting 
process  takes  place  after  the  fibers  are  freed  from  the  water  used  in 
making  the  pulp. 

act,  and  in  1876  established  a  forestry  agency  in  the  Depart- 
ment of  Agriculture.  Owing  to  abuses,  the  timber  culture  act 
was  repealed  in  1891,  while  the  State  laws  remained  largely 
dead  letters.  With  the  destruction  of  the  forests  the  center 
of  the  lumber  industry  gradually  shifted  from  the  northeastern 
States,  which  furnished  55  per  cent,  of  the  product  in  1850  and 
36  per  cent,  in  1860,  to  the  Lake  States,  where  33  per  cent,  was 


PRODUCTION    AND    EXPORT    OF    FOOD 


281 


secured  in  1880.     The  progress  of  the  kiiiibcr  industry  may  be 
seen  from  the  following  table: 


Year 

Woodland  and 

Forest  in  Farms 

(acres) 

Number  of 

Establishments 
(thousands) 

Capital 

(millions  of 

dollars) 

Number  of 

Employes 

(thousands) 

Value  of  Pro- 

ducts(millions 
of  dollars) 

1860 
1880 

159,310,177  1 
190,255,744 

20.7 
25.7 

74.5 
181.2 

75.8 
148.0 

95.7 
233.3 

244.  Products  of  the  mines :  Coal  and  iron.  —  In  his  highly 
eulogistic  book,  ''  Triumphant  Democracy,"  Mr.  Carnegie 
makes  the  statement  that  the  United  States  is  "  the  largest, 
most  populous,  wealthiest  civilized  nation  in  the  world,  and 
also  the  greatest  agricultural,  pastoral,  and  manufacturing 
nation,"  and  then  adds,  "  it  is  the  greatest  mining  nation  as 
w^ell."  The  basis  for  such  a  claim  is  stated  in  the  following 
table: 


Year 

Number  of 
Mines  or 
Quarries 

Capital 

Average  Num- 
ber of 
Wage-earners 

Value 

of 

Products 

1860... 
1870. . . 
1880... 

9,323 

8,775 
22,404 

$65,853,730 

245,757,606 

1,448,808,032 

100,754 
163,185 
295,991 

S89, 544,435 
191,002,543 
251,967,055 

While  practically  all  branches  of  mining  show  an  increase, 
the  rate  of  growth  in  different  lines  was  very  uneven.  In  the 
output  of  coal,  the  basic  industry  for  so  many  other  industries, 
there  was  an  increase  from  14,333,922  short  tons  in  1860  to 
71,481,570  in  1880,  or  three  to  four  times  as  rapid  a  growth  as 
that  of  the  population.  There  was  at  the  same  time  a  great 
change  in  the  relative  importance  of  bituminous  coal,  which 
now  constituted  60  per  cent,  of  the  total  as  against  43  per  cent, 
at  the  beginning  of   this  period.     By  1880  the  United  States 

1  1870 


282      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

turned  out  21  per  cent,  of  the  world's  production  of  coal,  being 
surpassed  only  by  Great  Britain.  The  production  of  iron  ore 
almost  trebled,  increasing  from  2,873,460  long  tons  in  1860  to 


Opex  Pit  Iron  Mine 
In  the  Lake  Superior  iron-ore  regions,  a  steam  shovel  scoops  up  the 
ore  from  open  pits,  filling  cars  at  the  rate  of  almost  one  a  minute. 
The  ore  is  then  carried  by  car  to  the  neighboring  shipping  ports  on 
the  lake  and  dumped  into  bunkers,  from  which  it  slides  down  chutes 
into  the  hatches  of  the  ore  ships.  Over  3000  tons  an  hour  are  loaded 
in  this  fashion.  Owing  to  the  ease  and  cheapness  of  the  methods, 
and  the  purity  of  the  ore,  the  Lake  Superior  region  is  now  producing 
about  three  fourths  of  the  iron  ore  used  in  the  United  States. 

7,120,362  tons  in  1880.  Pennsylvania,  Michigan,  and  New 
York  together  produced  about  two  thirds  of  the  total, 
ranking  in  the  order  named.  The  iron  ranges  of  the  Lake 
Superior'  regions    were    being    opened    up,    from    which    ore 


PRODUCTION    AND    EXPORT   OF   FOOD  283 

could  be  easily  and  cheaply  shipped  to  the  lake  manufacturing 
ports. 

245.  Other  mineral  products.  —  In  1880  Mulhall  estimated 
that  America  had  contributed  50  per  cent,  of  the  world's  stock 
of  gold;  the  United  States  was  then  the  greatest  single 
producer  of  the  precious  metals,  though  followed  closely  by 
Australia.  During  the  war  decade  the  supply  of  gold  from 
California  fell  off,  but  the  discovery  of  the  Comstock  lode  in 
1859  helped  to  make  good  the  deficiency.  In  1877,  the  year 
of  greatest  production,  the  yield  of  this  famous  mine  was 
$36,301,537,  of  which  $22,000,000  was  silver.  The  rush  to 
Nevada  after  the  discovery  of  the  precious  metals  there  was 
almost  as  great  as  to  California  a  decade  before:  from  6857  in 
1860,  the  population  of  the  State  grew  to  62,266  in  1880.  The 
total  annual  production  of  the  precious  metals  duringthis  period 
increased  from  $47,163,170  to  $74,127,177.  A  beginning  had 
been  made  too  in  the  production  of  copper,  the  United  States 
contributing  about  25,000  tons  in  1880  or  one  sixth  of  the  w^orld's 
supply.  Northern  Michigan  produced  five  sixths  of  the  do- 
mestic output  in  1879,  the  metal  being  found  in  an  almost  pure 
state  in  some  of  the  mines.  The  great  revolution  in  the  copper 
industry  belongs,  however,  to  the  next  period.  Of  immense 
importance  both  industrially  and  socially  was  the  discovery  of 
petroleum.  Until  its  introduction  the  tallow  candle  had  been 
the  almost  universal  source  of  artificial  light.  The  existence 
of  oil  had  long  been  known  in  New  York,  Pennsylvania,  and 
Ohio,  and  had  been  sold  for  medicinal  purposes  under  the  name 
of  ''  Seneca  oil,"  but  the  first  well  was  not  drilled  until  1859. 
From  2000  barrels  in  that  year  valued  at  $29  a  barrel  the  pro- 
duction rapidly  increased  to  3,000,000  barrels  in  1862,  when  it 
sold  as  low  as  ten  cents  a  barrel,  owing  to  over  production  and 
the  lack  of  a  widespread  demand.  At  first,  the  transportation 
facilities  were  wofuUy  •  inadequate  to  market  the  crude  pe- 
troleum, but  improvements  were  gradually  made  in  tank  cars, 
etc.  A  great  impetus  was  given  the  industry  by  the  building 
of  pipe  lines,  of  which  the  first  local  one  was  constructed  in 


284      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

1865;  the  first  through  Une  was  built  in  1875  to  Pittsburg P'" 
and  in  1880  the  first  pipe  line  to  the  seaboard  was  begun.  The 
production  increased  steadily  to  26,286,123  barrels  in  1880, 
worth  $24,600,638.  Vast  quantities  were  exported  to  Europe 
and  the  Orient,  the  fourth  rank  in  the  exports  of  the  United 
States  being  held  by  the  new  illuminant. 

SUGGESTIVE  TOPICS  AND  QUESTIONS.     CHAPTER  XX 

1.  Describe  the  effect  of  the  Civil  War  on  the  agriculture  of  the  South. 
[Schwab,  The  Confederate  States  of  America,  chap.  12;  Garner,  Reconstruc- 
tion in  Mississippi,  chaps.  4,  16;  Du  Bois,  Souls  of  Black  Folks,  chap.  2; 
Du  Bois,  Negro  Farmer,  79-81;  Hammond,  The  Cotton  Industry, 
127.] 

2.  What  was  the  effect  of  the  increase  in  the  exportation  of  grain 
and  decrease  in  that  of  cotton  during  the  Civil  War  upon  the  independence  of 
the  Confederate  States?     [Fite,  in  Quart.  Journ.  Econ.,  XX,  263-7.] 

3.  What  relation,  if  any,  can  be  shown  to  exist  between  the  pri(;e 
of  wheat  and  the  development  of  the  West?  [Veblen,  Price  of  Wheat 
since  1867,  in  Journ.  of  Polit.  Econ.,  I,  68-94.] 

4.  W^hat  were  the  principal  causes  of  the  growth  of  our  grain 
exports  after  1860?  [Report  of  U.  S.  Com'r  of  Agric,  1862,  pp.  66- 
73;  1876,  pp.  164-180;  1889,  pp.  251-264;  1891,  pp.  288-340;  Dunn, 
Amer.  Farms  and  Foods,  chaps.  12,  25;  Fite,  in  Quart.  Journ.  of  Econ., 
260-262.] 

5.  The  average  yield  of  wheat  per  acre  in  England  is  35  bushels,  and 
in  the  United  States  about  15.  Why  did  and  does  England  import  wheat 
from  the  United  States? 

6.  Trace  the  agitation  for  the  free  distribution  of  the  public  lands. 
Do  you  consider  it  a  wise  measure?  [Coman,  279;  Donaldson,  332-350; 
Sato,  428-439;  Powderly,  Thirty  Years  of  Labor,  chap.  8;  Congressional 
Globe,  1861-62,  pp.  40,  132-139,  909-910.] 

7.  Could  one  secure  a  homestead  to-day?  Is  there  any  free  public 
land  in  your  State?  Why  is  it  not  all  taken  up?  [Bliss,  Encycl.  of  Soc. 
Ref.,  art.  Pubhc  Domain;  Rep.  of  U.  S.  Land  Com'r.] 

8.  What  is  the  national  grange?  What  good  has  it  accomplished? 
[Martin,  Hist,  of  the  Grange  Movement;  Adams,  Granger  Movement,  in 
No.  Amer.  Rev.,  CXX,  394;  F.  J.  Foster,  The  Grange  in  New  England,  in 
Annals,  IV,  798-805;  C.  W.  Preisen,  Outcome  of  the  Granger  Movement, 
in  Pop.  Sci.  Mo.,  XXXU,  201;  Bliss,  Encycl.  of  Soc.  Ref..  art.  Grange.] 

9.  Wliat  were  the  grievances  of  the  farmers  that  led  to  the  so-called 
Granger  movement?  What  remedy  was  sought?  [Adams,  in  No.  Amer. 
Rev.,  CXX,  394;  Moody,  Land  and  Labor,  chap.  3;  Martin,  Hist,  of  Grange 


PRODUCTION   AND   EXPORT  OF   FOOD  285 

Movement,  part  6;  Hadley,  Railroad  Transportation,  129-139;  Adams, 
Railroads,  123-132.] 

10.  Should  the  forests  or  fisheries  ever  be  exhausted  if  properly- 
managed?     Is  this  true  of  mines?     Of  soils?     [Marshall  (4th  ed.),  244-7.] 

11.  Are  large  or  small  farms  better?  [Marshall,  Princ.  of  Econ., 
chap.  10,  sects.  8,  9;  chap.  11,  sect.  7;  Marshall,  Econ.  of  Industry, 
176-181;  De  Laveleye,  Elements  of  Polit.  Econ.,  110;  Nicholson,  Princ. 
of  Polit.  Econ.,  I,  309;  Gide,  Polit.  Econ.,  154-7;  Mill,  Princ.  of  Polit. 
Econ.,  book  I,  chap.  9,  sect.  4;  Fawcett,  Manual  of  Polit.  Econ.,  67-70; 
Mayo-Smith,  Statistics  and  Econ.,  chap.  4.] 

12.  Are  the  people  engaged  in  farming  employed  in  more  productive 
occupations  than  those  engaged  in  transportation  or  domestic  service? 
[Bullock,  Intro,  to  the  Study  of  Economics,  116;  Gide,  Principles  of  Polit. 
Econ.  (2d  ed.),  75-80.] 

13.  What  effect,  if  any,  has  the  introduction  of  farm  machinery  had 
upon  the  character  of  farm  labor?     [Quaintance,  69-92.] 

14.  Trace  the  history  of  the  flour  milling  industry.  [Pillsbury,  American 
Flour,  in  Depew's  One  Hundred  Years  of  American  Commerce,  I,  266-273; 
Tunell,  in  Journ.  of  Polit.  Econ..  V,  340-375;  Wheat  in  Commerce:  Bureau 
of  Statistics,  Summary  of  Commerce  and  Finance  for  March,  1888,  p.  1400.] 

15.  Describe  the  growth  of  the  pork-packing  and  dressed-beef  in- 
dustries. [Armour,  The  Packing  Industry,  in  Depew's  One  Hundred 
Years  of  American  Commerce,  II,  383-388;  U.  S.  Agric.  Reports,  1853,  p.  50; 
1863,  p.  207;  1875,  p.  96;  1876,  p.  312;  1877,  pp.  374-382;  1881,  pp.  613- 
614;  1889,  pp.  69-74;  1891,  p.  318.] 

SELECTED   REFERENCES.     CHAPTER  XX. 

*Carnegie:  Triumphant   Democracy,   chaps.  9,   11. 
**—- — Tenth  Census  (1880),  vol.  on  Agriculture. 
*Grady:  King  Cotton,  in  Harper's  Magazine,  LIII,  721. 
**Hammond:  The  Cotton  Industry,  120-191. 

* Report  of  the  U.  S.  Commissioner  of  Agriculture,  1876,  pp.  164- 

171,  312;  1877,  pp.  374-382. 
*  Wells:  Recent  Economic  Changes,  45-49,  57-59,  87-91,  158-188. 

Donaldson:  The  Public  Domain,  332-350. 

Fite:  The  Agricultural  Development  of  the  West  during  the  Civil  War,  in 

Quarterly  Journal  of  Economics,  XX,  259-278. 
Garner:  Reconstruction  in  Mississippi,  38-50,  122-146,  314-323. 
Hart:  American  History  told  by  Contemporaries,  IV,  chap.  23. 
Holmes:  Progress  of  Agriculture  in  the  United  States,  in  Rep.  of  U.  S. 

Dept.  of  Agric,  1899. 
Shaler:  The  United  States,  I,  chap.  7;  II,  525-527. 


CHAPTER   XXI 

AGRICULTURE   AS  A  BUSINESS  (1880-1906) 

y  246.  Position  and  growth  of  agriculture.  —  Down  to  1880 
agriculture  was  the  principal  source  of  wealth  in  the  United 
States,  but  the  two  succeeding  census  reports  have  shown 
larger  values  of  manufactured  articles  than  of  agricultural 
products;  in  1900  the  net  value  of  products  of  the  farm  was 
$3,764,177,706  and  of  pure  manufactures  $5,981,454,234.  The 
proportion  of  the  population  engaged  in  agriculture  has  also 
steadily  declined,  from  44.3  per  cent,  of  those  engaged  in  gainful 
occupations  in  1880  to  35.7  per  cent,  in  1900.  It  must  not, 
however,  be  inferred  from  these  facts  that  agriculture  is  a  de- 
clining industry.  The  farm  area  under  cultivation  has  increased 
more  rapidly  than  the  population,  while  improved  methods  of 
cultivation  and  of  transportation  have  so  greatly  increased  the 
yield  that  a  larger  surplus  of  agricultural  products  over  the 
needs  of  the  people  is  annually  set  free  for  export.  Agriculture 
still  gives  employment  to  a  larger  proportion  of  the  popula- 
tion than  any  other  branch  of  industry,  and  is  progressing 
only  less  rapidly  than  the  manufacturing  and  transportation 
industries. 

In  the  twenty-year  period,  1880-1900,  there  were  added  to 
the  farm  area  in  the  United  States  over  305,000,000  acres,  an 
increase  of  more  than  50  per  cent.  In  spite  of  this  great  ex- 
pansion of  settlement,  less  than  half  (841.2  million  acres)  of  the 
total  area  of  land  (1,911.2  million  acres)  was  in  farms  in  1900, 
and  less  than  one  half  of  this  (414.7  million  acres)  was  im- 
proved. Much  of  the  land  not  included  in  farms  or  remaining 
unimproved  is  arid  or  semi-arid  and  adapted  only  for  grazing, 
unless  it  is  reclaimed  by  means  of  irrigation.     It  is  probable, 

286 


AGRICULTURE   AS    A    BUSINESS 


287 


therefore,  that  the  next  census  will  report  a  slackening  in  the 
increase  of  improved  farm  area. 

247.   Number  and   size   of  farms.  —  This  immense   area  is 
divided  into  5,700.000  farms,  an  increase  of  1,700,000  or  over 


Copyright,  1902,  by  Underwood  and  Underwood. 

A  Combined  Harvester  axd  Thrasher  in  the  State  of  Wash- 
ington 
An  evolution  from  the  sickle  and  the  flail.  On  the  dry  Pacific 
slope  the  two  processes  are  performed  at  the  same  time  by  the  same 
piece  of  machinery^,  but  in  the  middle  States  the  sheaves  are  usually 
stacked  until  dry,  when  the  thrashing  is  done  by  steam  thrashers. 

40  per  cent,  since  1880,  which  is  a  rate  of  growth  more  rapid 
than  that  of  the  population.  Accordingly,  the  agricultural 
population  was  much  better  provided  with  separate  farms  at 


288      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

the  end  of  this  period  than  at  the  beginning;  between  1850  and 
>  1900  the  proportion  of  farms  to  the  rural  population  increased 
from  1  farm  for  every  14  such  persons  to  1  farm  for  every  9 
persons.  This  gain  represents  both  the  subdivision  of  old 
farms  and  the  taking  up  of  new  land.  The  average  size  of 
farms  declined  between  1850  and  1880,  owing  to  the  resort  to 
more  intensive  farming  in  the  eastern  States  and  to  the  division 
of  the  large  southern  plantations  after  the  Civil  War.  Since 
1880  there  has  been  a  slight  increase  again  in  the  size  of  farms 
(from  an  average  of  133.7  acres  in  that  year  to  146.6  acres  in 
1900)  as  a  result  mainly  of  the  inclusion  in  the  census  reports 
of  the  grazing  ranches  of  the  Southwest. 

While  these  farms  loom  large  when  compared  with  the  20- 
acre  farms  of  France  or  the  60-acre  farms  of  Great  Britain, 
under  the  agricultural  conditions  that  exist  here  the  United 
States  may  nevertheless  be  considered  a  country  of  small  and 
average  holdings.  Over  two  thirds  of  the  farms  (70.5  per  cent.) 
contain  20  to  175  acres,  and  only  2.6  per  cent,  are  larger  than 
500  acres.  The  large  farms,  moreover,  contain  a  smaller  pro- 
portion of  improved  area  than  do  the  small  ones,  which  are 
more  intensively  cultivated. 

There  was  a  fairly  steady  growth  in  the  average  value  of 
American  farms  between  1880  and  1900  (from  $3038  to  $3574), 
but  it  has  remained  for  the  half  decade  since  1900  to  add  con- 
spicuously to  their  value.  The  Secretary  of  Agriculture,  in  his 
report  for  1905,  estimates  that  the  farms  of  the  country  have 
increased  in  value  during  that  period  by  $6,133,000,000  or 
more  than  in  the  preceding  ten  years:  "  every  sunset  during  the 
past  five  years  has  registered  an  increase  of  $3,400,000  in  the 
value  of  the  farms  of  this  country." 

248.    Ownership  of  farms.  —  More  important,  however,  than 

vjtlie  expansion  of  the  farm  area  is  the  question  of  farm  tenure. 

^  In  1880,  for  the  first  time,  statistics  of  farm  ownership  were 

published  in  the  census,  when  the  gratifying  result  was  revealed 

that  three  quarters  (74.5  per  cent.)  of  the  farms  in  the  United 

States  were  operated  by  their  owners.     Since  that  time  the 


AGRICULTURE    AS    A    BUSINESS  289 

proportion  has  fallen  considerably,  to  71.6  per  cent,  in  1890 
and  64.7  per  cent,  in  1900,  and  alarm  has  been  expressed  that  ' 
our  democratic  conditions  of  land  ownership  were  giving  way 
to  a  system  of  tenantry.  The  reverse,  however,  seems  to 
be  true,  and  the  growth  of  the  tenant  class  indicates  rather 
the  endeavor  of  farm  laborers  and  persons  of  small  means  to 
make  themselves  independent  than  the  fall  of  former  owners  to 
the  rank  of  tenants.  This  is  shown  by  the  steady  growth  in  the 
number  of  those  owning  farms,  more  rapid  even  than  the 
increase  in  the  agricultural  population.  The  greatest  increase 
in  tenant  farming  has  been  in  the  South,  where  the  large  plan- 
tations have  been  broken  up  and  are  now  being  cultivated  by 
small  cash  or  share  tenants. 

The  division  of  the  plantations  of  the  South  and  of  the 
"  bonanza  "  farms  of  the  West  show  the  extension  of  the  small 
farm  system  rather  than  the  decline  of  ownership;  a  large 
proportion  of  the  tenant  farms  are  under  20  acres.  A  study 
of  the  ages  of  operating  owners,  tenants,  and  laborers  strength- 
ens this  conclusion.  Almost  90  per  cent,  of  the  farm  laborers 
are  under  35  years  of  age,  67  per  cent,  of  the  tenants  are  under 
45,  while  nearly  60  per  cent,  of  the  owners  are  over  45  years  of 
age.  There  is  thus,  with  advancing  age,  a  steady  rise  from 
the  condition  of  laborer  to  tenant  and  finally  to  that  of  owner. 
Nor  does  the  existence  of  mortgage  indebtedness  warrant  any 
gloomy  foreboding;  taken  in  connection  with  the  other  facts  it 
must  l^e  held  to  represent  the  struggle  of  the  former  tenant  to 
purchase  an  equity  in  the  land  he  tills,  or  of  the  small  owner 
to  provide  himself  with  the  necessary  capital  for  improvements. 
As  a  result  of  the  prosperity  of  the  last  few  years  the  farmers 
have  been  paying  off  these  debts,  and  are  to-day  probably  in  a 
stronger  position  than  at  any  time  in  our  history.  In  the 
South,  too,  the  profitable  price  of  cotton  during  the  past  three 
years  has  been  of  great  importance  in  lifting  the  cotton  planter 
out  of  the  slough.  The  crop  lien  has  almost  disappeared  and, 
for  the  first  time  in  the  financial  history  of  the  South,  deposits 
in  the  banks  of  that  section  now  exceed  $1,000,000,000. 
20 


290      ECONOMIC   HISTORY    OF    THE    UNITED   STATES 


AGRICULTURE    AS    A    BUSINESS 


291 


249.  Farm  machinery. —  The  distinctive  feature  of  Ameri- 
can agriculture  during  the  last  half  century  has  been  the 
growing  use  of  farm  machinery.  On  the  enormous  farms  of 
the  West  the  greatest  development  has  taken  place;  here  are 
used   enormous   fifty   horse-power  steam  traction   engines   to 


Copyright,  1902,  by  Underwood  and  Underwood 

A  Modern  Corn  Harvester 
A  machine  cutting  and  binding  corn  in  a  Michigan  farmer's  field. 
The  l)undles  of  corn  are  afterward  stacked  in  shocks  in  the  fields 
for  drying,  after  which  the  corn  is  husked,  usually  by  hand,  on  the 
field  or  in  the  barn. 


operate  plows,  harrows,  drills,  harvesting  machines,  etc.  But 
in  the  middle  West  the  progress  has  been  no  less  rapid,  and  the 
work  of  planting,  cultivating,  and  husking  corn  is  carried  on 
by  machinery;  mowing  machines,  horse  hay-rakes,  tedders, 
and  stackers  have  revolutionized  the  work  of  making  hay; 
while  potato  planters  and  diggers,  feed  choppers  and  grinders, 


292      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

manure  spreaders,  ditch-digging  machines,  and  innumerable 
other  implements  have  greatly  lessened  the  hand  labor  re- 
quired. Some  idea  of  the  great  development  may  be  gained 
from  the  following  table: 

Values  of  Farm  Implements  and  Machinery,   1880-1900 


Year 

Total  Values 

Values  per  Farm 

Value  per  Acre  of 
Farm  Land 

1880 

1890 

1900 

$406,520,055 
494,247,467 
761,261,550 

$101 
108 
133 

$.76 
.79 
.90 

The  motive  power  for  most  of  this  machinery  is  that  of  the 
horse  or  mule,  and  we  find  accordingly  that  the  increase  in  the 


The  stalks  of  corn  are  bound  together  at  the  top  as  they  are  cut, 
and  then  stacked  together  for  drying  and  until  it  is  convenient  to 
husk  them. 


AGRICULTURE    AS    A    BUSINESS 


293 


number  of  these  animals  has  proceeded  pari  passu  with  that  of 
farm  machinery.  "  In  the  last  twenty  years/'  concludes  the 
census  report  for  1900,  ''  by  the  aid  of  machinery,  and  the 
substitution  of  horse  power  for  hand  labor,  the  effectiveness  of 
human  labor  on  farms  has  been  increased  to  the  extent  of  about 
33  per  cent.''  There  are  in  the  United  States  over  20,000,000 
horses  and  mules  on  the  farms  alone;  whereas  including  those 
in  the  towns  there  are  in  Germany  only  4,184,000,  in  France 
2,903,000,  and  in  Great  Britain  2,000,000.  "  The  agricultural 
supremacy  of  the  United  States,"  writes  Prof.  Leroy-Beaulieu, 
''  has  been  won  through  the  combined  use  of  machinery  and  do- 
mestic animals  to  turn  into  wealth  the  fertility  of  a  virgin  soil." 
250.  Value  of  products.  —  Four  branches  only  of  American 
agriculture  are  extremely  important ;  these  are  the  raising  of 
live  stock,  the  production  of  ha^and  grain,  of  cotton,  and  of 
dairy  produce.  Over  75  per  cent,  of  all  farms  in  the  United 
States  in  1900  returned  one  of  these  as  the  principal  source  of  in- 
come, although  many  other  things,  such  as  garden  and  orchard 
products,  poultry  and  eggs,  and  tobacco,  are  raised  extensively 
in  connection  with  these  other  more  important  articles.  The 
following  table  presents  some  of  the  principal  facts  as  to  the 
progress  of  agriculture  during  the  period  1880-1900: 

Agricultural  Products 


Products 

1880 

1890 

1900 

Value  of  all   farm  products 

$2,212,500,000 

$2,460,000,000 

$4,739,000,000 

Value  of  livestock  on  farms 

1,577,000,000 

2,309,000,000 

2,982,000,000 

Total  production  eight  cere- 

2,699,000,000 

3,521,000,000 

4,435,000,000 

Total  production    hay  and 

forage,  tons 

35,000,000 

66,800,000 

79,000,000 

Total     production     cotton, 

bales 

5,700,000 

7,400,000 

9,500,000 

Total     production  tobacco, 

pounds 

472,600,000 

488,000,000 

868,000,000 

294      ECONOMIC   HISTORY    OF    THE    UNITED   STATES 

As  might  be  expected,  these  different  products  are  variously 
distributed  throughout  the  different  sections  of  the  country. 
Dairy  farming  is  predominant  in  the  North  Atlantic  States;  the 
production  of  hay  and  grain  employs  almost  every  farm  through- 
out the  North  Central  and  Northwestern  regions.  In  the  South 
cotton  is  practically  the  only  crop  below  the  twenty-fifth  parallel 
of  latitude,  while  north  of  this  tobacco, grains,  and  live  stocksup- 
plement  but  do  not  supplant  cotton.  The  raising  of  live  stock  is 
the  chief  industry  in  the  semi-arid  region  of  the  West,  and  is  also 
important  in  the  northern  States  generally.  The  North  Central 
division  constitutes  the  great  farming  section  of  the  country, 
producing  half  of  the  agricultural  wealth  ($2,360,000,000); 
within  this  district  Iowa  leads  as  the  most  important  farming 
State  in  the  Union,  with  a  product  of  $365,000,000  in  1900. 

251.  Cereal  production.  —  The  production  of  cereals  is  the 
most  important  branch  of  agriculture  in  the  United  States,  repre- 
senting more  than  half  the  total  value  of  the  crops  raised  and  re- 
quiring the  use  of  nearly  half  of  all  the  improved  farm  land.  There 
are  eight  cereal  crops  which  are  grown  in  considerable  quantities, 
and  which  are,  in  the  order  of  their  importance,  corn,  wheat,  oats, 
barley,  rye,  buckwheat,  rice,  and  Kafir  corn.  In  the  following 
table  will  be  found  the  statistics  of  their  production  since  1880: 

Production  of  Cereals 


Kind 

1880 

1890 

1900 

Value  in  1900 

Total     production     of      corn. 

1,755.000,000 

459,000,000 

407,800,000 

44,000,000 

19,800,000 

11,800.000 

110,000,000 

2,122,000,000 

468,000,000 

809,000,000 

78,000,000 

28,000,000 

12,000.000 

128,500,000 

2,666,000,000 
658,500,000 
94.3,000,000 
110,600,000 
25,500,000 
11,000,000 
283,700,000 

$828,000,000 

Total     production     of    wheat, 
bushels 

369,900.000 

Total     production       of     oats, 
bushels   

217,000,000 

Total    production     of     barley, 
bushels   

41,600,000 

Total       production      of      rye, 
bushels   

12,000,000 

Total   production    buckwheat, 
bushels 

Total     production      of       rice, 
pounds  

5.700.000 
484,000.000 

Total    production    of     cereals. 

2,699,000,000 

3,521,000,000 

4,435,000,000 

$1,484,000,Q00 

AGRICULTURE    A,S    A    BUSINESS 


295 


It  will  be  noticed  that  while  there  have  been  fluctuations 
in  the  separate  crops  there  has  been  no  slackening  in  the  in- 
crease of  cereal  production  as  a  whole.  Most  of  the  gain  has 
come  from  opening  up  new  land  in  Minnesota,  North  and 
South  Dakota,  Nebraska,  and  Kansas,  which  contributed  half 
of  the  increase  in  acreage  during  this  period.  Considerable 
additions   have    also    been   made    bv   Texas    and    Oklahoma. 


Corn  Husker  and  Shredder 
When  dry  the  corn  must  he  husked  as  soon  as  possible,  that  is, 
the  covering  must  he  stripped  from  the  ear.  The  task  is  enor- 
mous, and  numerous  machines  have  been  invented  to  do  the  work, 
but  until  recently  they  have  not  proved  satisfactory,  and  most  of 
the  husking  is  still  done  by  hand. 


The  center  of  cereal  production  has  moved  steadily  west- 
ward, from  eastern  Indiana  in  1860  to  eastern  Iowa  in  1900. 
With  the  practical  exhaustion  of  unoccupied  land  suitable 
for  grain  raising  it  is  evident  that  the  future  growth  of  cereal 
production  wall  depend  more  upon  improved  methods  of  agri- 
culture than  upon  the   addition  of  new  lands;  in   any  case 


296      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

the  rate  of  increase  will  probably  be  slower  than  it  has  been  in 
the  past. 

Of  the  separate  crops,  corn  is  by  far  the  most  important, 
representing  80  per  cent,  of  the  total  world  production  and  60 
per  cent,  of  all  the  cereals  in  the  United  States  in  1900;  the  crop 
for  that  year  was  worth  $828,000,000.  Most  of  the  corn  (75 
per  cent.)  is  fed  to  stock  throughout  the  corn-belt  and  comes  to 
market  in  the  form  of  beef  and  pork,  dairy  products,  and 
poultry.  In  the  production  of  wheat  the  United  States  also 
ranks  first.  Although  worth  less  than  one  half  as  much  as  the 
corn  crop  ($369,900,000),  it  attracts  more  general  attention 
because  of  its  importance  as  an  export  crop,  many  European 
nations  depending  upon  the  United  States  to  supply  their 
deficits.  With  the  exception  of  oats,  the  value  of  which  crop 
in  1900  was  $217,000,000,  the  other  cereals  are  of  minor  im- 
portance. 

252.  Cotton.  —  In  spite  of  a  steady  fall  in  price  the  produc- 
tion of  cotton  has  as  steadily  increased,  from  2,607,000,000 
pounds  in  1880  to  4,717,000,000  in  1900,  and  5,287,000,000  in 
1905.  Even  at  the  low  price  prevailing  in  1900,  this  amount 
was  then  worth  over  $370,000,000.  As  an  export  product  its 
importance  is  still  more  marked,  making  up  as  it  does  about 
one  quarter  of  the  total  exports.  Notwithstanding  vigorous 
efforts  on  the  part  of  foreign  producers  to  make  themselves 
economically  independent  of  the  United  States  in  the  produc- 
tion of  cotton,  this  country  produces  over  three  fourths  of  the 
cotton  supply  of  the  world.  As  a  result  partly  of  the  lower 
price  of  cotton,  southern  agriculture  has  been  diversified,  hired 
labor  has  been  largely  dispensed  with,  and  fertilizers  have  been 
generally  introduced;  $30,000,000  w^as  expended  for  fertilizers 
in  the  southern  States  in  1900,  or  over  half  of  all  so  spent  in 
the  country. 

Since  the  war  the  scarcity  of  labor  in  the  South  has  resulted 
in  the  invention  of  various  labor-saving  implements  in  the 
production  of  cotton,  of  which  the  most  important  are  the 
cottonseed  planter,  the  fertilizer  distributer,  the  cotton-stalk 


AGRICULTURE    AS    A    BUSINESS  297 

cutter,  and  various  kinds  of  plows  and  harrows.  Vigorous 
efforts  are  also  being  made  to  perfect  cotton-picking  machinery. 
The  last  quarter  of  a  century  has  seen  the  most  remarkable 
growth  in  the  cottonseed  industry,  and  in  the  utilization  of 
the  stalks  and  roots,  all  of  which  had  previously  been  regarded 
as  waste  products  to  be  disposed  of  at  considerable  expense. 

Cottonseed  oil,  obtained  from  the  seeds,  is  used  in  making 
salad  oils,  oleomargarine,  lard,  and  soap,  the  meal  is  used  as  a 
fertilizer  or  fed  to  the  stock,  and  the  hulls  and  stalks  are  used 
for  the  same  purpose;  southern  farmers  realized  almost  S50,- 
000,000  from  the  sale  of  cottonseed  alone  in  1900. 

A  peculiar  feature  of  cotton  production  is  that  it  is  largely 
in  the  hands  of  tenant  farmers,  over  67  per  cent,  of  the  crop 
having  been  produced  by  them  in  1900.  The  number  of 
tenant  farms,  especially  of  those  rented  for  cash,  has  increased 
much  more  rapidly  than  those  operated  by  their  owners;  of  all 
the  cotton  farms,  49  per  cent,  were  in  the  hands  of  negroes. 
While  the  average  yield  per  acre  was  less  for  the  negro  owner 
(.368  bale)  than  for  the  white  owner  (.398  bale),  the  difference 
is  so  slight,  considering  the  difficulties  under  which  the  negro 
operates,  as  to  afford  ground  for  hope  in  the  increased  efficiency 
of  the  negro  as  a  producer  of  cotton. 

253.  Other  products.  —  Next  to  cotton,  the  most  important 
crop  in  the  South  is  tobacco,  in  the  production  of  which  this 
country  also  leads  the  world.  The  tobacco  crop  of  1880  was 
only  slightly  in  excess  of  that  of  1860,  but  a  great  extension  in 
the  industr}^  has  since  taken  place,  the  output  in  1900  having 
reached  868.163.275  pounds,  worth  about  $57,000,000.  Over 
half  of  this  amount  was  raised  in  the  States  of  Kentucky,  North 
Carolina,  and  Virginia,  and  nearly  half  of  the  total  is  annually 
exported. 

In  the  production  of  sugar  the  United  States  falls  far  be- 
hind Europe,  raising  only  about  one  quarter  of  the  amount 
consumed  at  home.  Of  the  864,600,000  pounds  of  cane 
sugar  produced  in  1900,  over  542,000,000  pounds  came  from 
Hawaii  and  practically  all  the  remainder  from  Louisiana.     The 


298      ECONOMIC   HISTORY    OF    THE    UNITED   STATES 

production  of  beet  sugar  is  so  recent  that  statistics  appear  for  the 
first  time  in  the  census  of  1900,  when  about  160  milUon  pounds 
were  reported  (as  against  123,200  million  pounds  for  Europe), 
chiefly  from  beets  grown  in  California  and  Michigan.  It  is 
hardly  probable  that  the  future  will  see  any  considerable 
extension  of  cane  sugar  production  in  continental  America,  as 
it  can  be  grown  so  advantageously  in  the  outlying  possessions, 
Hawaii,  Porto  Rico,  and  the  Philippines,  as  well  as  in  Cuba; 
any  expansion  will  probably  take  place  in  the  production  of 
beet  sugar. 

Of  much  greater  value  is  the  annual  production  of  vege- 
tables ($242,000,000  in  1900),  of  fruit  ($131,000,000),  and  of 
flowers,  plants,  and  nursery  products  ($18,500,000).  While 
these  have  always  been  grown  in  the  vicinity  of  large  cities, 
recent  improvements  in  transportation,  especially  the  invention 
of  refrigerator  cars  and  cold  storage  warehouses,  have  caused 
a  rapid  expansion  of  their  production  in  the  remote  States  of 
California,  Florida,  Georgia,  and  the  lower  Mississippi  valley. 

The  same  causes  have  also  made  possible  the  preservation 
and  transportation  over  long  distances  of  dairy  products, 
poultry,  eggs,  and  other  perishable  commodities.  In  1900 
there  were  produced  on  the  farms  in  the  United  States 
1,293,800,000  dozen  eggs  worth  over  $144,000,000,  and  poul- 
try to  the  number  of  267,000,000  worth  about  $85,800,000; 
over  7,266,000,000  gallons  of  milk,  1,072,000,000  pounds  of 
butter,  and  16,000,000  pounds  of  cheese.  In  addition  to  this 
420,000,000  pounds  of  butter  and  282,000,000  pounds  of  cheese 
were  made  in  factories,  showing  an  almost  complete  trans- 
ference of  cheese-making  from  the  farm  to  the  factory.  Butter- 
making,  too,  received  a  great  impetus  with  the  invention  of 
the  centrifugal  cream  separator.  The  aggregate  value  of  the 
dairy  products  of  the  United  States  in  1900  was  estimated  at 
$590,827,154. 

254.  Live  stock.  —  Cattle-raising  is  a  frontier  industry,  and 
accordingly  we  find  not  only  that  it  is  carried  on  most  exten- 
sively in  the  western  part  of  this  country,  but   that   in  the 


AGRICULTURE   AS   A    BUSINESS  299 

United  States  as  a  whole  it  is  a  more  important  industry  than 
in  Europe.  In  1900  there  were  215,822,238  domestic  animals 
on  the  farms  and  ranges  of  the  United  States;  there  are  more 
cattle,  swine,  and  mules  here  than  in  any  other  country  in  the 
world,  and  Russia  alone  surpasses  us  in  the  number  of  horses. 
The  raising  of  cattle  for  food  purposes  is  the  most  important 
branch  of  the  live-stock  industry;  in  the  tw^enty  years,  1880- 
1900,  the  average  annual  production  of  beef  cattle  in  the 
United  States  amounted  to  over(32 ,000,000  heat]).  Since  1890, 
however,  there  has  been  a  decrease  in  the  number  of  neat 
cattle  in  the  country;  taken  in  connection  with  the  increase  in 
population,  it  represents  a  decline  of  about  20  per  cent.  Scarcely 
second  in  importance  is  the  production  of  pork  and  hog  prod- 
ucts, of  which  we  contribute  about  one  third  of  the  world's 
supply.  Sheep  are  raised  chiefly  for  their  wool,  and  of  these 
there  are  not  so  many  slaughtered.  The  raising  of  live  stock 
is  the  predominant  industry  in  the  semi-arid  States  of  the  West, 
as  Montana,  Wyoming,  Colorado,  and  Texas.  Before  slaughter- 
ing, however,  the  cattle  are  often  fattened  in  the  corn-belt. 

It  is  in  these  States  that  the  great  slaughter-houses  and 
meat-packing  establishments  are  found,  notably  in  the  cities 
of  Chicago,  Kansas  City,  and  Omaha.  Improvements  in  re- 
frigers^tion  and  transportation  have  caused  a  great  centraliza- 
tion of  these  industries  in  a  few  cities  and  permitted  the  growth 
of  an  immense  export  trade  in  meat  products,  amounting  to 
about  $185,000,000  in  1905.  The  dairy  industry,  which  is 
quite  distinct  from  the  live-stock  industry,  is  confined  chiefly 
to  the  corn-belt  and  the  eastern  States.  Within  the  twenty- 
year  period,  1880-1900,  the  value  of  live  stock  on  the  farms 
and  ranges  of  the  United  States  has  almost  doubled,  increasing 
from  1,577  million  dollars  to  2,982  million  dollars.  At  the 
same  time  there  has  been  a  considerable  improvement  in  the 
breeds,  an  increase  in  weight,  and  more  scientific  breeding. 

255.  Irrigation  and  the  public  lands.  —  With  the  expansion 
of  the  population  and  the  taking  up  of  all  the  fertile  public 
lands,  the  problem  of  reclaiming  the  arid  plains  of  the  western 


300      ECONOMIC   HISTORY    OF    THE    UNITED   STATES 

States  has  begun  to  attract  attention.  Nearly  two  fifths  of 
the  territory  of  the  United  States  has  an  annual  rainfall  of  less 
than  twenty  inches,  and  is  thereby  reduced  to  a  condition  of 
sterility,  except  for  grazing  purposes,  unless  it  can  be  artifi- 
cially provided  with  the  necessary  moisture.  Much  of  this 
land  is  exceedingly  fertile,  but  cannot  be  cultivated  except 
where  it  is  brought  under  irrigation.  This  arid  belt  includes 
the  eight  States  of  Montana,  Idaho,  Wyoming,  Colorado,  Utah, 


Irrigation  Ditches 
At  the  upper  end  of  each  ditch  it  is  usual  to  construct  some  device 
by  which  the  amount  of  water  entering  from  the  river  can  be  regu- 
lated, and  its  fair  share  distributed  to  each  ditch.  The  effect  of 
irrigation  has  been  marvelous  in  reclaiming  and  developing  the  arid 
and  semi-arid  sections  of  the  country. 

Nevada,  Arizona,  and  New  Mexico,  and  parts  of  several  other 
adjoining  States. 

Although  irrigation  had  been  practised  in  America  from 
time  immemorial  by  the  Indians,  only  a  few  hundred  acres 
were  being  irrigated  when,  in  1847,  the  Mormons  began  their 
experiments  in  Utah.  By  1870  there  may  have  been  20,000 
acres  under  irrigation  in  the  United  States,  but  the  next  decade 
was  one  of  rapid  construction  of  small  ditches  by  individuals 
and  associations  of  farmers,  and  by  1880  the  irrigated  territory 


AGRICULTURE    AS    A    BUSINESS  301 

had  grown  to  not  less  than  1,000,000  acres.  "•  In  the  decade 
1880  to  1890  occurred  the  '  boom  '  of  speculative  enterprise 
in  irrigation  canals.  Large  sums  of  money  were  obtained  for 
irrigation  works  by  the  sale  of  stocks  and  bonds,  and  great 
enterprises  were  projected.  .  .  .  Nearly  all  of  these  failed  of 
financial  success.  ...  In  1889  there  were  3,631,381  acres 
irrigated.  .  .  .  During  the  following  decade  the  irrigated 
acreage  doubled  in  extent.  This  has  been  due  rather  to  the 
extension  and  enlargement  of  the  many  canals  existing  in 
1889  and  to  the  more  complete  practice  of  irrigation  on  the 
lands  then  under  ditch  than  to  the  construction  of  new  and 
large  systems  of  irrigation."  ^  In  1900  there  were  7,539,545 
acres  under  irrigation,  from  which  were  raised  crops,  chiefly 
hay  and  forage  and  vegetables,  with  a  value  of  $87,000,000. 
While  most  of  the  work  done  hitherto  has  been  carried  out  by 
private  initiative,  a  demand  has  recently  arisen  for  irrigation 
at  government  expense,  in  response  to  which  Congress  in  1902 
provided  for  the  gradual  building  of  irrigation  works  out  of  the 
proceeds  of  the  sales  of  public  lands^  Regulation  of  the  use  of 
the  limited  water-supply,  either  by  State  or  Federal  authority, 
is  essential  to  the  success  of  irrigation. 

There  remain  of  the  public  domain  of  the  United  States 
about  842,000,000  acres,  practically  all  of  which  is  in  the  arid 
zone.  The  necessity  of  a  revision  of  our  land  laws  in  disposing 
of  these  lands  has  been  emphasized  by  the  recent  discovery  of 
gigantic  frauds  to  obtain  possession  of  large  tracts  of  grazing 
land. 

256.  Forest  industries.  —  Though  the  lumber  industry  is  so 
distinct  from  farming  that  it  is  enumerated  in  the  census  reports 
as  a  manufacturing  industry,  we  may  nevertheless  consider  it  in 
connection  with  agriculture.  The  total  value  of  forest  products 
cut  or  produced  on  the  farms  in  1899  was  $109,989,868;  on  the 
other  hand,  the  value  of  products  of  the  luml)er  industry 
proper  was  $566,832,984.  The  annual  cut  from  our  forests 
every  year  amounts  to  about  forty  billion  feet  board  measure; 
1  Twelfth  Census,  VI,  801. 


302      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

of  this  the  Lake  States  contribute  27  per  cent.,  although  they 
are  rapidly  yielding  their  supremacy  to  the  southern  States, 
whose  production  has  increased  from  12  per  cent,  of  the  total 
in  1880  to  25  per  cent,  in  1900.  As  the  northern  forests  have 
been  exhausted  there  has  been  a  gradual  displacement  of 
hardwood"  by  the  conifers,  especially  by  the  yellow  pine  of  the 
southern  States;  about  half  of  the  output  consists  of  the  various 
species  of  pine. 

With  the  practical  exhaustion  of  some  of  our  most  valuable 
forests,  due  to  reckless  and  wholesale  cutting,  the  importance 
of  forestry  regulations  has  become  increasingly  evident.  In 
1898  the  Federal  government  began  practical  work  in  the 
introduction  of  forestry,  which  received  a  great  stimulus  in 
1905,  when  the  care  of  the  National  forest  reserves,  embracing 
63,000,000  acres,  was  transferred  to  the  Department  of  Agri- 
culture and  a  separate  bureau  was  organized  under  the  name 
of  the  Forest  Service.  Over  150  professional  trained  foresters 
are  employed  who  manage  the  forests  on  the  public  lands  and 
cooperate  with  private  owners  to  introduce  scientific  forest 
management.  The  rise  in  the  price  of  lumber  shows  the  neces- 
sity for  a  more  careful  conservation  of  our  forest  wealth. 

257.  The  fisheries.  —  As  one  of  the  extractive  industries  the 
fisheries  also  may  properly  be  grouped  with  agriculture.  Al- 
though the  relative  importance  of  this  industry  has  greatly 
declined,  the  United  States  is  outranked  only  by  Great  Britain 
in  the  annual  catch  of  fish;  in  1900  the  catch  was  worth  $40,- 
000,000,  of  which  the  coast  and  ocean  fisheries  contributed 
$27,000,000,  the  river  fisheries  $9,000,000,  and  the  lake  fisheries 
$4,000,000.  A  large  manufacturing  industry  for  canning  and 
preserving  the  various  fish  products  has  been  called  into  being. 
In  1900  over  320,000,000  pounds  of  fish  were  canned,  smoked, 
or  salted,  representing  a  value  of  $22,000,000;  about  half  of 
this  was  salmon.  As  in  the  case  of  our  forests,  much  has  been 
done  by  the  Federal  government,  through  the  Fish  Commission, 
to  make  good  the  waste  occasioned  by  our  earlier  prodigality. 
Lakes   and  streams  have  been  restocked  with  fish  and   more 


AGRICULTURE    AS    A    BUSINESS  303 

stringent  fish  and  game  laws  passed,  designed  to  prevent  the 
extermination  of  the  supply. 

SUGGESTIVE  TOPICS   AND   QUESTIONS.     CHAPTER  XXI 

1.  How  long  would  it  have  taken  to  harvest  the  crops  of  1900  with 
the  hand  implements  in  use  75  years  before?  [Quaintance,  19-28; 
Thirteenth  An.  Rep.  of  U.  S.  Bur.  of  Lab.] 

2.  Is  the  change  in  the  proportion  of  farms  to  the  non-urban  popula- 
tion from  one  farm  to  fourteen  persons  in  1850  to  one  farm  to  nine  persons 
in  1900  (sect.  247)  due  to  an  increase  of  farms  or  a  decrease  in  the  farming 
population?     [Twelfth  Census  (1900),  vols.  I,  V.] 

3.  In  his  report  for  1901  the  Secretary  of  Agriculture  says,  "We  im- 
port annually  millions  of  dollars'  worth  of  tropical  products  that  could 
be  grown  in  the  United  States."  Should  the  tariff  be  extended  so  as  to 
stimulate  the  growth  of  these  products? 

4.  If  the  present  increase  in  the  consumption  of  bread  continues,  is 
there  danger  of  a  wheat  famine  in  the  future?  [Crookes,  The  Wheat 
Problem,  chap.  1.] 

5.  Why  are  the  exports  of  corn  so  small  as  compared  with  those  of 
wheat? 

6.  Describe  the  ravages  of  the  cotton  boll  weevil,  and  attempts  to 
exterminate  it.  [Publ.  Amer.  Econ.  Ass.,  3d  series,  V,  114-117;  Agric. 
Year-l>ook.  1906,  pp.  313-324.] 

7.  Why  do  not  other  countries  raise  their  own  cotton  instead  of 
importing  it  from  the  United  States? 

8.  In  1905  some  of  the  cotton  planters  agreed  to  burn  part  of 
their  crop  in  order  to  keep  the  price  up.  Was  this  economically 
desirable? 

9.  Describe  the  production  of  beet  sugar  in  the  United  States.  Is  it 
likely  to  increase?  [The  World's  Sugar  Production  and  Consumption 
1800-1900,  in  Mo.  Sum.  of  Com.  and  Fin.,  Nov.,  1902;  Taylor  in  Annals, 
XXII,  179;  Baker  in  Rev.  of  Rev.,  XXIII,  324;  Lighton  in  Cosmopol. 
XXXV,  181;  Rutter  in  Quart.  Journ.  Econ.,  XVII,  44.] 

10.  Describe  one  of  the  bonanza  farms  of  the  West.  [Powell  in 
Arena,  XXV,  373;  Bindloss  in  Living  Age,  CCXXXII,  498;  Carver  in 
World's  Work,  VII,  4232.] 

11.  What  are  the  most  important  agricultural  products  raised  near 
your  home?     Do  you  think  more  profitable  ones  could  be  introduced? 

12.  Is  the  hve-stock  industry  carried  on  near  cities?  The  dairy 
industry?     Why?     [Trotter,  114;  Adams,  Com.  Geog.,  77-79.] 

13.  Describe  the  methods  of  irrigation.  [Twelfth  Census  (1900),  VI, 
801-880;  Mead,  Irrigation  Institutions;  Newell,  Irrigation.] 


304      ECONOMIC    HISTORY    OF    THE    UNITED   STATES 

14.  Would  it  be  possible  to  obtain  a  free  grant  of  land  to-day?  How 
would  you  go  about  it? 

15.  Describe  scientific  forestry,  and  tell  how  far  it  has  been  intro- 
duced into  the  United  States.  [Reps.  U.  S.  Dept.  of  Agric,  especially 
1860,  1865,  1870,  1875,  1886;  Publ.  U.  S.  Bur.  of  Forestry,  Sen.  Doc, 
54th  Cong.,  1  sess.,  no.  84;  H.  C.  Adams,  Sci.  of  Fin.,  242-247;  Fernow, 
Econ.  of  Forestry.] 

16.  Describe  the  threatened  extinction  of  the  seal  and  the  success  of 
efforts  to  preserve  them.  Are  any  fish  in  American  waters  threatened 
with  extinction,  and  why?  [Henderson,  Amer.  Dipl.  Questions,  10-15; 
Sprague  in  Overland,  N.  S.,  XLII,  435;  Jordan  in  International,  VII, 
222.] 

17.  Why  was  there  such  wide-spread  discontent  among  the  farmers 
about  1890?  [Rep.  Ind.  Com.,  VI,  36-143,  225-268;  Peffer,  Farmer's  Side; 
Emerick,  An  Analysis  of  Agricultural  Discontent,  in  Pol.  Sci.  Quart.,  XI, 
XII;  Elliott,  Amer.  Farms,  books  2,  3;  Bemis,  The  Discontent  of  the 
Farmer,  in  Journ.  Pol.  Econ.,  I,  193-213.] 

18.  Sketch  the  history  and  demands  of  the  Populist  Party.  [Peffer, 
Farmer's  Side;  Peffer,  Mission  of  Pop.  Party,  in  No.  Amer.  Rev.,  Dec, 
1893;  Walker,  The  Farmer's  Movement,  Annals,  IV,  790;  Gladden,  The 
Embattled  Farmers,  in  Forum,  X,  315;  McVey,  The  Populist  Movement; 
Bliss,  Encycl.  of  Soc  Ref.,  arts.  Farmer's  Alliance,  Farmer's  Movement, 
People's  Party;  Drew,  The  Present  Farmers'  Movement,  in  Pol.  Sci. 
Quart.,  VI,  282-310.] 

SELECTED  REFERENCES.     CHAPTER  XXI 

** Twelfth  Census  (1900),  vols.  5,  6. 

**Harwood:  The  New  Earth. 

*Industrial  Commission  Reports,  vols.  6,  10,  11. 

*Xewell;  Irrigation  in  the  United  States. 

**Leroy-Beaulieu:  The  United  States  in  the  Twentieth  Century,  part  2. 

* Report  of  the  U.  S..Dept.  of  Agriculture,  1889,  pp.  69-74,  251-264; 

1891,  pp.  288-340;  1899;  1905. 

Hammond:  The  Cotton  Industry,  chaps.  6,  7. 

Holmes:  Peons  of  the  South,  in  Annals,  IV,  904-919. 

Peffer:  The  Farmer's  Side.  21-42,  56-74,  148-167. 

Pratt:  The   Organization   of  Agriculture,   225-235. 

Quaintance:     The  Influence  of  Farm  Machinery  on  Production  and  Labor. 

Thompson:  From  the  Cotton  Field  to  the  Cotton  Mill. 


CHAPTER   XXII 

TRANSPORTATION  AND   COMMUNICATION     (i 860-1 880) 

258.  Growth  of  the  railway  system.  —  The  means  of  trans- 
portation and  communication  were  developed  upon  an  unprec- 
edented scale  during  the  twenty  years  after  the  Civil  War. 
Railroad  building  was  checked  during  the  war,  but  only  tem- 
porarily, and  the  decade  saw  the  number  of  miles  almost 
doubled  —  from  30,635  in  1860  to  52,914  in  1870.  The  years 
1868-72  in  particular  were  years  of  extraordinarily  rapid 
growth,  especially  for  the  upper  Mississippi  valley.  Rail- 
road extension  was  again  interrupted  by  the  crisis  of  1873, 
which  was  largely  caused  by  the  too  rapid  railway  construction 
and  the  intense  speculation  accompanying  it,  but  by  1879 
it  began  to  revive,  and  the  end  of  the  decade  saw  the  number 
of  miles  again  almost  doubled;  by  1880  there  were  92,296 
miles  of  railroad  in  the-  United  States.  This  increase  of  almost 
75  per  cent,  in  ten  years  far  outran  the  growth  in  population, 
which  was  only  30  per  cent,  in  the  same  period.  Most  of  the 
new  construction  took  place  in  the  northwestern  States  and 
afforded  an  outlet  for  the  grain  supplies  which  these  States 
were  beginning  to  pour  into  the  world's  markets.  The  building 
of  the  railways,  too,  both  facilitated  and  was  demanded  by 
the  enormous  immigration  which  now  began  to  fill  up  our 
western  territory.  During  this  same  decade  the  population  in 
the  Northwest  increased  44  per  cent,  and  that  of  the  Pacific 
States  114  per  cent.  By  "1880  there  was  one  mile  of  road  com- 
pleted to  every  571"  of  the  population,  as  against  every  1087  in 
1860.  The  people  of  the  United  States  were  already  better 
supplied  with  railroad  facilities  than  were  those  of  any  other 
country. 

21  305 


306      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 


259.  Character  of  the  American  railroad.  —  The  nature  of 
the  traffic  carried  by  the  American  raih'oads  was  already 
impressing  upon  them  certain  characteristics  which  differen- 
tiated them  greatly  from  European  railroads.    Over  60  per  cent. 


RAILWAA^S  IX  THE  UNITED  STATES 
1860 


n 


1  Madison  >A-;;i--«rj<if:;:J^r^r       A"\^, 

i  ARK.         y      /       t»-'|         c--'''Ron,e\AA.he;i 

'■  p    /    J/Okolonal  Alums'^- ^ 

-1.  /"""f            M          TalUd^ga  \    /\Ea. 


I  ^      MJISS 

I  VlcUsbure         For 


1      I         T. 
!  AL. 

I     I  Momgi 

».,  LA.Wo^"»l  \       V     J,,, 

/  Bayou  Sarte^fa  Mol/.l'eV^  T^l   >'  .^  ■  — 


Eagle  LI 


NOTE:  In  1860  there  was  also  in  California, 
a  railway  from  Sacramento  to  Folsom  City 
( 22  miles.) 


of  the  freight  tonnage  in  1880  consisted  of  heavy,  bulky  articles, 
such  as  coal,  grain  (these  two  alone  making  up  45  per  cent,  of 
all  freight),  iron,  lumber,  stone,  and  petroleum.  It  is  evident 
that  heavier  rails,  bridges,  and  cars  were  needed  than  where 


TRANSPORTATION    AND    COMMUNICATION         307 

the  traffic  consisted  of  light  general  merchandise  and  manu- 
factures. Even  more  necessary  before  such  goods  could  l)e 
moved  profitably  was  the  establishment  of  low  rates.  Conse- 
quently, the  history  of  American  railway  development  since 
the  Civil  War  has  been  in  both  these  directions.  Probably  no 
other  single  inffiience  has  been  as  effective  in  reducing  the  cost 
of  transportation  and  improving  the  general  condition  of  the 
roads  as  the  substitution  of  steel  for  iron  rails.  A  few  imported 
steel  rails  had  been  laid  as  early  as  1864,  but  their  manufacture 
in  the  United  States  did  not  begin  until  1867.  Their  use 
increased  slowly,  but  by  1877  the  annual  production  of  steel 
rails  had  passed  that  of  iron  rails,  and  by  1880  was  exactly 
double.  At  the  same  time  there  was  a  steady  reduction  in 
price,  from  $166  (currency)  per  ton  in  1867  to  $67.50  in  1880. ^ 
The  use  of  steel  in  the  construction  of  locomotives  and  cars, 
as  well  as  the  enhanced  strength  of  the  rails,  led  to  a  great 
increase  in  their  size,  weight,  and  capacity,  and  at  the  same 
time  the  permanent  way  was  improved  by  reduction  of  grades, 
better  alignment  of  track,  improved  drainage  and  ballasting, 
and  better  bridges.  These  improvemeiits  permitted  the  car- 
riage of  coal,  grain,  and  similar  commodities  in  large  quantities 
and  the  handling  them  in  bulk,  and  led  to  the  development  of 
facilities  especially  designed  for  such  traffic.  This  period  also 
witnessed  the  introduction  of  the  first  sleeping  and  dining  cars. 
260.  The  transcontinental  railroads.  —  The  idea  of  a  trans- 
continental railroad  had  been  advocated  as  early  as  1834,  and 
the  gold  discoveries  in  California  had  revived  the  demand  for 
its  construction,  but  nothing  was  done  in  this  direction  until 
1862.  Then  the  political  and  military  necessity  of  uniting  the 
Pacific  States  with  the  East,  and  of  securing  better  means  of 
communication  with  the  Southwest,  induced  Congress  to  aid 
several  companies  to  build  lines  across  the  western  plains. 
The  Union  Pacific  railroad,  which  constructed  its  line  from 
Omaha  to  Ogden,  received  12,000,000  acres  of  the  public  lands, 
and  the  Central  Pacific,  which  built  eastward  from  Sacramento 
1  In  1879  the  price  fell  to  $48.25. 


308      ECONOMIC   HISTORY    OF    THE    UNITED   STATES 

to  connect  with  the  Union  Pacific,  received  8,000,000  acres. 
Additional  grants  to  the  Kansas  Pacific  and  other  corporations 
brought  up  the  total  to  33,000,000  acres.  In  addition  to  these 
grants  of  land  the  three  companies  mentioned  received  large 
loans   of  money   from  the   federal   government.     During  the 


Driving  the  Last  Spike 
The  Union  Pacific  and  the  Central  Pacific  railroads  were  joined  at 
Promontory  Point,  near  Ogden,  Utah,  on  May  10,  1869.  When  the 
"  last  spike,"  made  of  California  gold,  was  driven  in  the  news  was 
telegraphed  to  every  part  of  the  country  and  was  received  with  general 
rejoicing.  The  building  of  this  first  transcontinental  railroad  was  a 
striking  evidence  of  the  irrepressible  energy  of  the  people  of  the  United 
States.  It  was  of  incalculable  value  in  developing  the  West  and 
uniting  it  with  the  East. 

twenty-one  years  between  1850  and  1871,  at  which  time  land- 
grants  were  discontinued,  more  than  159,000,000  acres  were 
placed  at  the  disposal  of  railroad  corporations  by  the  Federal 
government  and  55,000,000  acres  by  the  State  governments. 
In  addition  to  the  transcontinental  lines,  other  roads  were 
built  running  north  and  south,  and  the  country  was  rapidly 


TRANSPORTATION    AND    COMMUNICATION  309 

being  united  by  great  trunk  lines  and  a  network  of  shorter 
lines. 

261.  Railroad  combination.  —  More  momentous  even  than 
the  physical  growth  and  improvement  of  the  railroads  have 
been  the  various  problems  to  which  they  have  given  rise.  One 
of  the  first  of  these  to  attract  public  attention  was  that  of 
consolidation.  As  long  as  the  traffic  was  local  the  lines  re- 
mained short  and  unconnected;  not  until  after  1850  was  a 
length  of  500  miles  attained  by  any  one  line.  In  the  decade 
1850-60  many  consolidations  of  short  links  into  one  connected 
road  took  place,  but  the  larger  combinations  of  connecting 
roads  into  great  trunk  lines  did  not  occur  until  after  the  war. 
Then  the  growth  of  the  w^estern  grain  traffic  and  other  long- 
distance business  made  through  shipments  very  desirable,  and 
under  the  leadership  of  such  skilful  railroad  managers  as  Thomas 
A.  Scott  and  Cornelius  Vanderbilt  an  era  of  combination  took 
place.  By  1880  the  great  trunk  lines  as  they  exist  to-day 
had  already  been  formed.  With  the  growth  of  through  traffic 
it  became  necessary  also  to  develop  methods  of  reducing  ex- 
penses and  avoiding  reshipment  of  goods  from  one  line  to 
another.  One  solution  of  the  problem  was  the  growth  of 
special  companies  to  look  after  the  through  business  of  vari- 
ous kinds.  Thus  there  grew  up  sleeping-car  companies,  express  / 
companies,  and  fast -freight  companies.  ' 

262.  Railroad  competition  and  pooling.  —  The  formation  of 
great  trunk  lines,  while  reducing  the  number  of  competitors, 
increased  the  intensity  of  competition,  especially  for  the  through 
traffic  between  the  Central  West  and  the  Atlantic  seaboard. 

(The  main  lines  that  were  bidding  for  western  business  were  the 
New_Ym4v_C£ntral,  Pennsylvania,  Erie,  and  Baltimore  and 
Ohio,  but  their  rrvalry  dUnoFbecome  serious  until  after  1869, 
in^hich  year  the  New  York  Central  and  Pennsylvania  secured 
througli  connections  to  Chicago.  A  few  years  later  Chicago 
was  reached  by  the  Erie,  Baltimore  and  Ohio,  and  the  Grand 
Trunk,  and  a  series  of  ruinous  rate  wars  was  initiated  by  the 
efforts  of  the  competing  roads  to  divert  as  much  of  their  rivals' 


310      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

business  to  themselves  as  possible.  As  consolidation  was  out 
of  the  question,  agreements  were  made  which  usually  took  the 
form  of  pools,  according  to  which  the  whole  traffic  or  earnings 
were  divided  among  the  erstwhile  competitors  on  some  pre- 
arranged basis.  Pooling,  which  began  in  1870,  was  the  leading 
characteristic  of  railroad  development  during  the  decade 
following. 

263.  Rates.  —  ''No  other  incident  of  the  rapid  development 
of  railway  facilities  in  the  United  States  since  the  Civil  War  is 
so  thoroughly  characteristic  as  the  progressive  reduction  in  the 
charges  for  the  transportation  services  they  perform."  Pas- 
senger fares  have  not  been  reduced  so  rapidly  as  freight  rateS; 


Train  of  1<s.'(> 
Tho  illustration  shows  a  mixed  train,  composed  of  baggage  cars, 
freight  cars,  and  passenger  coaches.     This  would  be  a  rare  sight 
to-day,  when  the  business  of  the  railroad  is  much  more  specialized 
than  it  was  even  thirty-five  years  ago. 

but  competition  has  taken  the  form  rather  of  improving  the 
service.  In  1871  the  average  rate  per  passenger  per  mile  was 
/2.632  cents  (gold),  and  in  1881  it  was  2.446  cents.  Freight 
rates  declined  more  rapidly,  especially  for  the  through  traffic; 
this  was  brought  about  largely  by  the  various  improvements 
dn  the  equipment  and  management  of  railroads  which  have 
.been  described.  The  average  rate  per  ton  per  mile  was  1.927 
cents  (gold)  in  1867;  ten  years  later  it  was  1.286  cents,  a  re- 
duction of  over  one  third.  The  effect  of  these  low  rates  was 
soon  seen   in  the  development   of  the  West,  the  shifting  of 


TRANSPORTATION    AND    COMMUNICATION  13 11 

cereal  production  entirely  from  New  England  and  largely  from 
the  North  Atlantic  States  to  the  Central  and  Northwestern 
States,  and  the  diversion  of  traffic  from  the  lake  and  canal 
routes  to  the  railroads.  As  the  railroads  began  to  carry  more 
of  the  traffic,  the  cities  of  Boston,  Philadelphia,  and  Balti- 
more began  to  clamor  for  a  larger  share  than  they  had  been 
able  to  secure,  while  the  Erie  Canal  and  the  Hudson  River 
were  the  chief  highways  of  commerce.  Accordingly,  a  sys- 
tem of  "  differential  "  rates  was  established,  which  made 
the  charges  to  those  cities  somewhat  less  than  that  to  New 
York,  and  placed  them  on  an  equality  in  bidding  for  the 
export  trade. 

264.  Water  routes.  —  We  shall  get  a  still  clearer  idea  of  the 
growing  importance  of  railway  transportation  by  noting 
briefly  the  changes  that  were  occurring  in  the  lake  and  river 
traffic.  The  Erie  Canal  was  the  only  artificial  water-way 
Avhich,  after  the  Civil  War,  still  carried  any  considerable  amount 
of  traffic;  as  late  as  1868  practically  all  of  the  grain  arriving 
at  New  York  City  came  by  way  of  the  canals.  After  1873, 
however,  the  canal  traffic  began  to  decline  rapidly.  In  1876 
tUe  New  York  railroads  carried  more  than  three  times  as  much 
tonnage  as  the  canals  and  more  than  half  of  all  the  grain  re- 
ceived at  New  York  City.  The  diversion  of  traffic  to  the 
railroads  became  so  great  that  in  1882  the  canal  tolls  were 
abolished,  but  this  had  little  effect  on  the  traffic,  which  has 
'ever  since  stead Uy  lessened. 

After  the  Civil  War  it  was  found,  too,  that  the  traffic  which 
had  previously  gone  down  the  Mississippi  River  to  New  Orleans 
was  now  permanently  diverted  to  the  railroads  or  to  the  lake 
route.  The  receipts  at  New  Orleans  by  water  of  western 
produce  —  flour,  pork,  and  lard  —  were  only  just  sufficient  for 
domestic  consumption,  while  no  wheat  at  all  was  received. 
Cotton  formed  the  staple  of  the  Mississippi  River  traffic,  and 
even  this  fell  off  as  the  years  went  by.  As  railroads  were 
extended  to  river  points,  they  gradually  encroached  upon  the 
steamboat    traffic,   which   reached    high-water   mark   in    1879, 


\>'y 


^yV^S^^AA- 


312       ECONOMIC   HISTORY    OF    THE    UNITED    STATES 

when  the  jetties  were  formally  opened  to  commerce.     After 
that  date  it  steadily  declined  in  importance. 

265.  Lake  and  coasting  trade.  —  While  the  canal  traffic  was 
falling  off  that  of  the  Great  Lakes  was  increasing.  The  growth 
of  commerce  can  be  shown  best  by  noting  the  amount  of  freight 
passing  through  the  Detroit  River  and  the  St.  Marv's  Falls 


Copyright,  1905,  by  Detroit  Publisliing  Co. 

The  Locks  at  Sault  Ste.  Marie,  Mich. 
On  the  right  is  the  Poe  lock,  the  largest  in  the  world,  800  feet  in 
length,  100  feet  wide,  and  admitting  vessels  drawing  20  feet  of  water. 
Vessels  with  a  tonnage  of  over  41,000,000  tons  passed  through  this 
canal  in  1906,  or  more  than  three  times  the  tonnage  passing  through 
the  Suez  Canal.  This  is  the  best  single  index  of  the  traffic  on  the 
Great  Lakes,  as  the  canal  is  an  indispensable  link  in  this  chain  of 
natural  water-ways,  and  therefore  of  great  economic  value. 

Canal.  1  The  former  increased  from  9,000,000  tons  in  1873  to 
20,000,000  in  1880;  the  latter,  somewhat  more  rapidly,  from 
403,657  tons  in  1860  to  1,734,890  in  1880.  Most  of  the  traffic 
on  the  Great  Lakes  consisted  of  coal,  iron  ore,  or  lumber  —  all 
of  which  were  being  rapidl}'  exploited  —  and  was  carried  gener- 

1  Statistics  covering  the  movement  of  freight  upon  the  whole  lake 
system  were  not  collected  until  1889. 


TRANSPORTATION    AND    COMMUNICATION  313 

ally  as  through  freight  from  one  end  of  the  system  to  the  other. 
Accompanying  the  growth  in  traffic  there  went  on  a  growth  in 
the  size  of  the  vessels  and  a  steady  substitution  of  steam  for 
sails  as  a  motive  power.  In  1862  the  sailing  tonnage  was  more 
than  double  the  steam  tonnage,  but  by  1882  the  two  were  equal. 
On  the  other  hand,  the  total  number  of  vessels  engaged  in 
the  coasting  trade  between  1860  and  1880  remained  ahiiost 
exactly  at  a  standstill,  except  for  a  temporary  increase  during 
the  war.  Those  employed  in  the  fisheries  fell  off  by  1880  to 
one  half  the  number  so  engaged  in  1860. 

266.  Foreign  shipping.  —  The  greatest  decline,  however,  was 
seen  in  our  foreign  merchant  marine,  which  decreased  from 
2,496,894  tons  in  1861,  the  highest  point  ever  reached,  to  1,314,- 
402  tons  in  1880.  During  the  war  almost  a  third  of  our  vessels 
were  sold  to  foreigners,  others  were  destroyed  by  Confederate 
cruisers  or  sold  to  the  government  for  conversion  into  trans- 
ports and  cruisers.  Congress  refused  to  admit  vessels  sold 
abroad  to  American  registry  again,  and  our  ship-builders  were 
unable  to  make  up  the  deficiency.  The  heavy  war  taxes  which 
had  been  imposed  upon  hulls  of  vessels  and  marine  engines 
were  repealed  in  1868,  but  the  duties  on  cordage,  copper,  and 
iron  still  remained,  although  a  few  ship-building  materials  had 
been  admitted  free  of  duty  between  1872  and  1875.  These 
disadvantages  made  it  impossible  to  compete  w^ith  British  and 
foreign  ship-builders  in  the  construction  of  iron  steamships,  and 
with  the  passing  of  the  wooden  sailing  vessel  the  carrying  trade 
passed  almost  entirely  into  foreign  hands.  By  1865  the  percent- 
age of  foreign  commerce  carried  in  American  bottoms  was  only 
27  per  cent.,  and  by  1880  it  had  fallen  to  18  per  cent.  Between 
1865  and  1870  we  had  made  a  slight  gain,  even  with  our  wooden 
sailing  vessels,  which  did  not  have  to  give  up  valuable  cargo 
space  to  coal,  as  did  steamers  on  long  voyages;  but  in  the  latter 
year  the  opening  of  the  Suez  Canal  gave  the  advantage  to  the 
steamer  in  the  China  trade  by  permitting  it  to  recoal  en  route, 
and  inflicted  the  last  blow  on  our  struggling  merchant  marine. 

267.  Means    of    communication.  —  The  development    and 


314      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

improvement  of  the  means  of  communication  kept  pace  with 
the  industrial  growth  in  other  directions.  By  1880  there  were 
110,727  miles  of  telegraph  lines  in  the  country;  the  number  of 
messages  sent  in  that  year  was  31,703,181,  at  an  average  cost 
per  message  of  42  cents.  The  invention  in  1872  of  duplex 
telegraphy  gave  a  tremendous  impetus  to  this  industry  and 
greatly  reduced  the  cost  of  sending  messages.  In  1876  the 
telephone  was  invented,  and  by  1880  was  already  in  general 
use,  there  being  in  that  year  i^n  the  United  States  34,305  miles 
of  wire  and  over  50,000  receiving  telephones  in  operation. 
The  first  commercially  successful  Atlantic  cable  was  laid  in 
1866,  although  an  earlier  one  had  been  in  operation  for  a  few 
months  in  1858.  Significant  as  these  events  were,  the  great 
application  of  electricity  to  industry  did  not  take  place  until 
after  1880,  but  enough  had  been  done  to  show  the  importance  of 
this  new  force.  The  postal  business  of  the  country  expanded 
during  this  period  even  more  rapidly  than  the  population  and  in- 
dustry; three  improvements  in  the  mail  service  at  the  beginning 
of  this  period  greatly  increased  its  efficiency:  delivery  of  mail 
by  carriers  (1863),  postal  money  orders  (1864),  and  mail  cars  in 
which  the  sorting  of  mail  was  carried  on  en  route  (1864).  The 
number  of  post-offices  grew  from  28,498  in  1860 to  42,989 in  1880. 
In  the  latter  year  there  were  published  in  the  United  States 
11,314  newspapers  and  periodicals,  of  which  8,633  were  weekly. 

SUGGESTIVE  TOPICS  AND  QUESTIONS.     CHAPTER  XXII 

1.  What  part  of  the  country  showed  the  most  rapid  railway  growth 
after  the  Civil  War?  Why?  [Hadley,  37-8;  Johnson,  27;  Scribner's 
Stat.  Atlas.] 

2.  Describe  the  diversion  of  traffic  from  the  Great  Lakes  to  the 
railroads,  and  give  reasons.     [Tunell  in  Journ.  Pol.  Econ.,  V,  340.] 

3.  Was  the  policy  of  land  grants  in  aid  of  railroads  successful?  Why 
was  it  discontinued?  [H.  C.  Adams,  Sci.  of  Finance,  258;  Sanborn,  Con- 
gressional Grants  of  Land  in  Aid  of  Railways,  chaps.  5-8;  Ringwalt,  225; 
Johnson,    chap.    22. 

4.  Did  the  L"'^nited  States  ever  get  back  the  money  loaned  to  the 
Pacific  railroads?  [Report  of  Secretary  of  Treasuiy,  1897;  Davis,  chap. 
8;  Annals,  VHI,  259;  Johnson,  316.] 


TRANSPORTATION    AND    COMMUNICATION  3 15 

5.  Can  effective  competition  be  secured  between  independent  rail- 
roads?    [Hadley,  chap.  4;  Noyes,  Amer.Railroad  Rates,  chap.  5.] 

6.  Describe  the  principal  consolidations  that  took  place  during  this 
period.     [Hadley,  chap.  5.] 

7.  What  were  the  principal  pools  of  the  seventies,  and  upon  what 
basis  arranged?     [Johnson,  chap.  16;  Hadley,  chap.  5;  Ringwalt,  272.] 

8.  What  were  the  so-called  differentials?  In  whose  favor  did  they 
operate?     [Hadley,  9.5-98.] 

9.  What  are  the  main  differences  between  the  American  and  the 
English  or  European  railways?  Which  do  you  think  are  better?  [Pratt, 
Amer.  Railways,  64,  269;  Johnson,  347;  Hadley,  chap.  12.] 

10.  Describe  the  building  and  completion  of  the  Pacific  railroads. 
[Davis,  Union  Pac.  Ry.,  chap.  5;  Johnson,  Great  Events,  XVHI,  287- 
301]. 

11.  What  was  the  Credit  Mol)ilier?  [Davis,  chap.  6;  Crawford, 
Credit  Mobilier  of  America;  Rept.  Ho.  of  Rep.,  42  Cong.,  3  sess.,  nos.  77, 
78;  Rhodes,  Hist,  of  U.  S.,  VII,  chap.  1.] 

12.  Do  any  cities  in  the  United  States  owe  their  importance  to  rail- 
roads? 

13.  What  would  happen  if  all  the  railroads  in  this  country  were  sud- 
denly destroyed? 

14.  How  does  our  internal  commerce  compare  with  our  foreign? 
[Mo.  Sum.  of  Com.  and  Fin.  — ^  latest  number.] 

15.  Tell  about  the  first  invention  of  the  telephone.  Was  Bell  entitled 
to  the  credit  and  profits?     [Bryn,  Progress  of  Invention;  Encycl.] 

16.  Compare  transportation  by  water  and  rail  from  Chicago  to  New 
^'ork  as  to  speed,  cost,  etc.  What  effect  do  these  have  on  traffic?  [In- 
ternal Commerce,  Treas.  Rept.,  1887;  Xewcomb,  Railway  Econ.,  35.] 

17.  What  were  the  jetties  at  the  mouth  of  the  Mississippi  River,  and 
for  what  purpose  were  they  built? 

18.  What  is  a  grain  elevator  and  its  advantages? 

19.  Describe  the  laying  of  the  Atlantic  cable.  [Johnson,  Great  Events, 
XVIII,    175-185.] 

SELECTED  REFERENCES.      CHAPTER  XXII 

*Carnegie:  Triumphant  Democracy,  chaps.  12,  13. 

* Tenth  Census  (1880),  vol.  VIII,  96-130. 

*Davis:  Union  Pacific  Railway,  chaps.  1-4. 

**Hadley:  Railroad  Transportation,  chaps.  1-7. 

**Marvin:  American  Merchant  Marine,   chap.    14. 

**Tunell:  The  Diversion  of  the  Flour  and  Grain  Traffic  from  the  Great 

Lakes  to  the  Railroads,  in  Journal  of  PoHtical  Economy,  V,  340- 

375. 


316      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

Adams:  Railroads,  Their  Origin  and  Problems,  11&-216. 

Bates:  American  Marine,  chap.  9. 

Jenks:  Road  Legislation  for  the  American  State. 

Million:  State  Aid  to  Railways  in  Missouri. 

Ringwalt:  Transportation  Systems  in  the  United  States,  181-240,  272-284. 

Wells:  Recent  Economic  Changes,  37-40,  99,  516-522. 


CHAPTER    XXIII 
RAILROADS  AND  INTERNAL   COMMERCE     (1880-1906) 

268.  The  development  of  the  railway  system. — Hand  in 
hand  with  the  increase  in  the  production  of  material  wealth 
has  proceeded  the  growth  of  means  of  (transportation  and 
distribution)  Cheap  and  rapid  systems  of  transportation  have 
been  a  necessity  over  the  enormous  distances  of  the  American 
continent,  and  the  railroad  has  therefore  attained  an  impor- 
tance greater  here  than  in  any  other  country  in  the  world. 
In  no  country  has  the  growth  of  the  railway  so  directly  affected 
the  development  of  the  staple  industries.  '(For  years  the 
histoiT  of  the  railroads  was  the  history  of  the  country .V 

Thp  dpcndo  1S80-1><<^n  \vitnps;s;prl  thp  orpntpst  expansion  of 
the  railway  net  that  had  vet  been  seen:  f^rom  93,296  miles  in 
1 880__the_railwav  mileage  o-rew  to  163,597  in  1890,  a  practic al 
doubling  in  ten  years.  The  construction  was  carried  on  chiefly 
in  the"  central  and  western  States,  where  the  agricultural  and 
mining  wealth  was  being  developed,  and  where  new  transpor- 
tation facilities  were  most  needed.  The  crisis  of  1884  was 
brought  about  by  the  too  rapid  and  speculative  railroad 
building  of  the  years  immediately  preceding.  /J3y  1890  the 
country  seemed  to  have  been  pretty  well  supplied  with  rail- 
way facilities,  and  since  that  time  construction  has  been  less 
rapid .^J  The  crisis  of  1893  and  the  resulting  depression  also 
retarded  railroad  growth,  and  forced  the  railways  not  merely 
to  curtail  new  building,  but  to  practise  the  most  rigid  econo- 
mies. Nevertheless,  by  1900  the  railroad  net  contained  193,345 
miles;  in  1905  it  had  grown  to  214,478  miles. 

The  importance  of  the  transportation  industry  in  the 
United  States  may  be  indicated  by  a  few  figures:  the  capital 

317 


318      ECONOMIC    iflSTORY    OF    THE    UNITED    STATES 

value  of  the  railways  of  the  country  is  about  $14,000,000,000, 
or  one  seventh  of  the  total  wealth;  they  constitute  about  two 
fifths  of  the  railway  mileage  of  the  world,  and  some  ten  per 
cent,  more  than  that  of  all  Europe;  during  the  twenty  years, 
1880-1900,  the  proportion  of  persons  engaged  in  gainful  occupa- 
tions who  were  employed  in  trade  and  transportation  grew 
from  10.7  per  cent,  to  16.4  per  cent.  More  than  1,()(K),000  men 
are  now  emplovf^d  on  the  railroads. 

269.  The  public  service  of  the  railroads :  Freight  traffic.  — 
The  freight  service  of  the  railroads,  whether  regarded  from  the 
standpoint  of  earnings  or  of  puVjlic  service,  is  much  more  im- 
portant in  the  United  States  than  the  passenger  service;  the 
earnings  from  freight  traffic  are  almost  three  times  as  much  as 
from  passengers,  while  there  are  forty  times  as  many  freight 
cars  as  passenger  cars.  The  growth  of  the  freight  business,  too, 
has  been  more  rapid  than  that  of  any  other  branch  of  service, 
having  more  than  trebled   in  the  past  twenty  years.     More 

/       than  hjxU  of  the  tonnage  consists  of  products  of  the  mines  — 
'         coal,  ore,  stone,  etc.  —  while  about  a  quarter  more  is  made  up 

W»  of  lumber,  grain,  live  stock,  and  other  heavy  articles  shipped 
in  large  quantities.  Railroads  were  a  necessity  for  moving 
these  goods  from  the  points  of  production  to  the  markets,  and 
the  chief  object  in  railroad  building  was  to  afford  these  fa- 
cilities as  speedily  and  cheaply  as  possible. 

As  the  regions  developed  the  original,  hastily  constructed 
lines  had  to  be  replaced  wdth  better  and  more  expensive  ones. 
The  roadbed  and  track  of  the  best  lines  have  within  the  past 
twenty-five  years  been  relaid,  curves  straightened,  grades 
reduced,  old  wooden  or  iron  bridges  replaced  by  strong  steel 
or  stone  ones,  and  heavier  rails  laid,  millions  of  dollars  having 
been  spent  by  the  railroads  in  these  improvements.  These 
changes  were  necessitated  by  the  introduction  of  larger  and 
heavier  cars  and  locomotives,  adapted  to  the  heavy  traffic 
peculiar  to  the  United  States.  Thirty  years  ago  the  average 
freight  })ox-car  in  the  United  States  had  a  capacit}^  ranging 
from  16,000  to  24,000  pounds;  in  1881  the  40,000  pound  car 


f 


RAILROADS    AND    INTERNAL    COMMERCE  319 

was  introduced;  to-day  pressed  steel  cars  with  a  capacity  of 
100,000  pounds  are  in  common  use.  The  typical  American 
car  is  probably  the  60,000  pound  car.  The  locomotive  shows 
the  same  evolution  as  regards  both  weight  and  strength: 
locomotives  weighing  over  100  tons  and  capable  of  draw- 
ing train  loads  of  2,000  to  2500  tons  are  found  on  the  best- 
equipped  lines.  As  the  capacity  of  the  railroads  to  handle 
the  increasing  traffic  grew,  and  also  the  size  of  the  units 
handled,  the  terminal  facilities  for  handling  freight,  especially 
coal,  ore,  and  grain,  were  wonderfully  developed.  Electric 
cranes,  elevators,  and  other  labor-saving  devices  for  handling 
these  commodities  in  bulk  were  introduced  at  stations,  and 
great  economies  in  loading  and  unloading  the  cars  were 
effected. 

270.  The  passenger  service.  —  While  the  competition  of 
rival  railroads  for  freight  traffic  has  resulted  in  the  steady 
reduction  of  freight  rates,  in  the  passenger  service  competi- 
tion has  led  rather  to  improvements  in  accommodations  and 
speed.  To-day  the  passenger  on  an  American  railroad  can 
prol^ably  travel  more  luxuriously  than  in  any  other  country  in 
the  world.  The  use  of  vestibuled  trains,  better  constructed 
cars,  and  improved  methods  of  heating  and  lighting  have 
contributed  greatly  to  the  comfort  of  traveling.  At  the  same 
time  its  safety  has  been  increased  for  the  public  by  the  intro- 
duction of  the  block  signal  system,  and  of  automatic  train- 
brakes  and  couplers;  although  these  appliances  date  only  from 
the  eighties,  almost  all  passenger  cars  to-day  are  equipped 
with  them.  In  spite  of  these  precautions,  however,  the  loss 
of  life  on  American  railroads  is  appalling:  in  1905  there  were 
9703  persons  killed  and  86,008  injured  in  railroad  accidents. 
The  loss  of  life  and  limb  was  greatest  among  the  employees, 
especially  the  trainmen,  among  whom  1  in  every  133  was 
killed  and  1  in  every  9  was  injured.  Chiefly  responsible  for 
these  accidents  have  been  the  lack  of  precautions  in  guarding 
the  right  of  way  and  giving  due  notice  of  the  approach  of 
trains,  the  single  tracks  and  grade  crossings,  the  insufficient 


320      ECONOMIC   HISTORY    OF    THE    UNITED   STATES 


RAILROADS    AND    INTERNAL    COMMERCE  321 

labor  force  and  the  long  hours  of  work,  together  with  a  certain 
recklessness  in  the  running  of  trains.  This  showing  is  unparal- 
leled anywhere  else  in  the  world. 

271.  Rates  and  fares.  —  The  causal  connection  between 
railroad  rates  and  traffic  is  one  of  interaction.  As  the  business 
of  the  country  grew  it  became  possible  for  the  railroads  to 
reduce  rates,  and  the  lower  charges  in  turn  stimulated  new 
traffic.  Transportation  is  a  business  which  yields  "  increasing 
returns":  after  the  road  is  built  and  equipped,  its  expenses 
do  not  grow  proportionately  with  an  increase  in  traffic;  as 
the  business  develops,  it  is  possible  at  the  same  rates  to 
secure  constantly  increasing  returns  in  profits,  or  the  divi- 
dends may  remain  at  the  same  level  and  charges  be  re- 
duced. As  a  matter  of  fact,  both  results  have  been  secured 
in  the  United  States,  although  the  increasing  rate  of  profits 
has  been  largely  concealed  by  the  universal  practice  of 
watering  the  stock.  The  decline  in  rates  is  more  obvious 
and  striking.  This  has  been  brought  about  by  competition 
between  the  railways  themselves,  by  the  competition  of  the 
railways  with  water  routes,  and  finally  by  the  competition 
between  various  productive  centers  in  different  parts  of  the 
country. 

The  average  revenue  per  ton  per  mile  received  by  the  rail- 
roads in  the  United  States  has  decreased  from  1.24  cents  in 
1882  to  .93  in  1890,  and  .75  in  1900;  since  then,  owing  to  the 
iiuibility  of  the  railroads  to  handle  the  enormous  expansion  of 
business,  it  rose  to  .79  cents  in  1904,  but  we  may  expect  to 
see  a  decline  again.  Passenger  fares  have  not  been  reduced 
to  the  same  extent,  as  lower  fares  do  not  stimulate  travel  in 
anything  like  the  same  degree  that  lower  freight  rates  stimu- 
late freight  traffic;  the  average  revenue  per  passenger  per  mile 
was  2.05  cents  in  1904,  as  against  2.42  cents  in  1883.  Since 
1906  a  further  reduction  has  been  made  as  a  result  of  state 
legislation.  Freight  rates  are  considerably  lower  and  pas- 
senger fares  somewhat  higher  than  those  in  European  coun- 
tries. The  reduction  in  freight  rates  is  best  brought  out  by 
22 


322      ECONOMIC   HISTORY    OF    THE    UNITED    STATES 

comparing  the  average  annual  rates  on  wheat  by  lake,  canal, 
and  rail  from  Chicago  to  New  York,  which  is  briefly  shown 
in  the  following  table: 

Average  Annual  Rates  on  Wheat  from  Chicago  to  New  York 


Wheat   (average  rates  per  bushel) 

Year 

By  Lake  and  Canal 

By  Lake  and  Rail 

By  All  Rail 

1868 

1880 

1890 

1900 

1904 

Cents 

22.8 

12.3 

5.8 

4.4 

4.7 

Cents 

29.0 

15.7 

8.5 

5.1 

5.0 

Cents 
42.6 
19.9 
14.3 
9.9 
11.1 

272.  Discriminations.  —  While  rates  are  not  as  low  as  they 
could  be  made,  few  complaints  are  made  by  shippers  as  to 
excessive  rates.  On  the  other  hand,  no  charge  against  the 
railroads  has  been  so  constantly  reiterated  as  the  practice  of 
granting  discriminating  rates  —  discriminations  between  per- 
sons, between  localities,  and  between  different  classes  of  goods. 
Of  these  the  least  defensible  are  personal  discriminations. 
While  lower  rates  to  large  shippers  for  car-load  lots  are  not  in 
themselves  objectionable,  special  favors  have  often  been  granted 
to  individuals  or  corporations  in  order  to  secure  their  business 
by  diverting  it  from  rival  roads.  The  Standard  Oil  Company 
and  other  trusts  owe  their  success  in  large  measure  to  their 
ability  to  secure  such  concessions.  Discriminations  are  granted 
by  means  of  secret  rates  and  rebates;  by  paying  rentals  for 
private  cars;  by  commissions  for  securing  freight;  by  under- 
billing  and  under  classification;  by  allowances  in  handling 
and  storing  freight,  etc.  Although  these  were  forbidden  by 
the  Interstate  Commerce  Act  of  1887,  the  receivers  of  the 
Baltimore  and  Ohio  Railroad  testified  before  the  Industrial 
Commission    in    1898   that    more   than    50    per   cent,   of   the 


RAILROADS   AND   INTERNAL    COMMERCE  323 

traffic,  at  least  on  certain  lines,  was  carried  at  discriminating 
rates.  After  that  time,  owing  to  the  heavy  traffic  which 
rendered  it  less  necessary,  the  practice  declined  somewhat, 
and  was  finally  practically  put  an  end  to  by  the  Hepburn  Act 
of  June,  1906. 

Discriminations  between  places,  while  objectionable,  are 
not  secret  and  therefore  less  reprehensible  than  personal  dis- 
criminations. They  were  forbidden  in  1887  under  the  "  long 
and  short  haul  "  clause  of  the  Interstate  Commerce  Act,  which 
prohibited  a  greater  charge  for  a  short  than  for  a  long  haul 
over  the  same  line  and  in  the  same  direction.  The  value  of 
this  provision  has  since  been  greatly  lessened  by  excepting 
competitive  rates  from  its  operation.  More  complaint  has 
been  caused  by  the  so-called  ''  differentials,"  which  discrim- 
inate between  terminal  points,  as  between  the  Atlantic  Coast 
cities  or  between  the  leading  cities  of  the  central  West. 

The  question  of  discrimination  between  different  classes  of 
goods  involves  the  whole  problem  of  freight  classification,  and 
must  be  passed  over  here  with  a  simple  reference. 

273.  Pools  and  traffic  associations.  —  The  Interstate  Com- 
merce law  of  1887  forbade  "  any  contract,  agreement,  or  com- 
bination .  .  .  for  the  pooling  of  freights  of  different  competing 
railroads,"  and  thereby  made  illegal  all  the  existing  pools 
between  the  railroads.  To  secure  cooperation,  the  various 
traffic  associations  simply  reorganized,  without  the  pooling 
clause,  ''  for  the  purpose  of  facilitating  the  transaction  and 
exchange  of  business  with  each  other."  These  associations, 
while  technically  avoiding  pooling,  regulated  rates  and  pun- 
ished offending  members.  In  1897  and  1898  the  Supreme 
Court  decided  in  two  important  cases  —  those  against  the 
Trans-Missouri  Freight  Association  and  the  Joint  Traffic  Asso- 
ciation—  that  rate  agreements  violated  the  Anti-Trust  law  of 
1890,  which  prohibited  ''  every  contract,  combination  in  the 
form  of  a  trust  or  otherwise,  or  conspiracy,  in  restraint  of  trade 
or  commerce,"  and  that  they  were  therefore  illegal.  As  pools 
and  rate  agreements  were  now  both  forbidden,  the  railways 


324      ECONOMIC   HISTORY    OF    THE    UNITED   STATES 

were  compelled  to  devise  a  new  method  of  regulating  their 
relations  or  return  to  unrestricted  competition.  The  first  and 
most  noticeable  result  was  the  consolidation  of  hitherto  inde- 
pendent lines  and  the  absorption  of  the  smaller  roads  by  the 
large  systems.  Beginning  with  1898  the  consolidation  of 
railroads  proceeded  very  rapidly,  until  it  was  finally  checked 
by  the  decision  in  the  Northern  Securities  case  (1904)  which 
declared  the  combination  of  parallel  roads  to  be  illegal.  These 
consolidations  had  been  brought  about  by  purchase  in  some 
cases,  by  lease  or  by  means  of  stock-holdings  in  others.  Mean- 
while, however,  the  trunk  and  transcontinental  lines  had 
devised  another  way  of  preventing  competition  without  re- 
sorting to  combination;  this  was  by  the  so-called  "  community 
of  interest."  As  we  shall  see,  some  eight  or  nine  groups  of 
capitalists  control  over  two  thirds  of  the  railway  mileage  in 
the  United  States.  By  making  representatives  of  one  group 
members  of  the  boards  of  directors  of  other  groups,  a  com- 
munity of  interest  and  management  was  established  which 
secured  the  harmonious  cooperation  of  the  various  lines. 
Usually  there  has  been  a  community  of  ownership  also,  the 
owners  of  one  group  of  roads  being  financially  interested 
in  the  other  rival  roads.  That  combination  of  some  sort 
between  the  railroads  is  inevitable  seems  clear;  the  practical 
problem  is  therefore  not  so  much  its  prevention  as  its  regula- 
tion. 

274.  Consolidation.  —  While  the  movement  toward  con- 
solidation in  the  railroad  world,  as  well  as  in  manufacturing 
industries,  began  soon  after  the  Civil  War,  it  was  confined  for 
the  most  part  to  the  connection  of  separated  links  into  com- 
plete lines.  The  consolidation  of  hitherto  independent  lines 
into  vast  systems  containing  thousands  of  miles  received  a 
great  stimulus  in  the  eighties,  and  a  still  greater  one  in  the 
late  nineties,  as  the  result  of  the  causes  just  enumerated. 
The  growth  of  these  long  consolidated  systems,  at  the  expense 
of  lines  of  moderate  length,  is  well  shown  in  the  following 
table: 


I     i^l     l^ll«§ 


^       s         ..I 

""I    I    till 
J5  S  o  5  4  S 


RAILROADS    AND    INTERNAL    COMMERCE  325 

Classification  of  Railways  by  Mileage 


Item 

Mileage  over  1000 

1867 

1877 

1887 

1897 

1904 

Number  of  railroads-  • 
Aggregate  mileage  .  .  . 
Per  cent,  total  mileage 

1 

1152 
6.69 

11 

13,648 

20.16 

28 

55,447 

43.64 

44 
103,566 
54.85 

48 
143,952 
65.40 

Item 

Mileage  from  250  to  1000 

1867 

1877 

1887 

1897 

1904 

Numljer  of  railroads.  . 
Aggregate  mileage  -  • . 
Percent,  total  mileage 

21 

8881 
51.58 

63 
27,661 
40.86 

99 

45,225 

35.70 

91 
44,953 

23.80 

73 
36.07:j 
16.39 

Mileage  under  250 

1867 

1877 

1887 

1897 

1904 

Numlier  of  railroads.  • 
Aggregate  mileage  .  . . 
Per  cent,  total  mileage 

72 

7183 
41.73 

362 

26,388 
38.98 

434 
26,373 
20.76 

1023 

40,326 

21.35 

1193 

40,088 
18.21 

There  are  at  present  in  the  United  States  some  1800  rail- 
road lines,  but  many  of  these  are  controlled  by  other  railroads 
through  lease,  purchase  of  a  majority  of  the  stock,  and  in  other 
ways,  so  that  the  number  of  independent  operating  lines  is 
given  by  the  Interstate  Commerce  Commission  as  about  800. 
Most  of  the  connecting  lines  have  been  consolidated  into  a  few 
great  systems  which  are  controlled  by  groups  of  capitalists. 
The  following  are  the  most  important  ''  groups,"  with  the  ap- 
proximate mileage  for  1906.  although  these  figures  vary  from 
year    to    year:    Vanderbilt    (21,353),   Pennsylvania   (16.836), 


326      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

Harriman  (14,725),  Hill  (20,242),  Morgan  (18,879),  Gould 
(16,520),  Moore  (13,028),  Rockefeller  (10,293).  These  great 
consolidations  have  followed  in  the  main  the  territorial  group- 
ings of  railways;  each  system  serves  for  the  most  part  a  par- 
ticular district  and  has  in  some  cases  developed  special  kinds 
of  traffic.  Since  the  consolidation  of  parallel  lines  has  been 
declared  illegal,  it  is  unlikely  that  the  existing  groups  will 
be  reduced  by  further  consolidation,  but  they  wdll  probably 
remain  and  be  enlarged  by  extension  or  b}"  new  construction. 
The  United  States  has  thus  been  divided  up  by  a  few  large 
transportation  companies,  as  England,  France,  Italy,  and  other 
European  countries  had  earlier  been  parceled  out.  While  con- 
solidation has  resulted  in  convenience  to  the  pu])lic  and  econ- 
omies in  management  and  facilities,  it  places  a  dangerous 
amount  of  power  in  the  hands  of  a  few  men,  which  should 
clearly  be  under  strict  government  control. 

275.  State  regulation  and  control.  —  In  the  United  States 
the  States  have  the  right  to  control  commerce  carried  on 
within  their  boundaries,  while  the  power  to  regulate  interstate 
commerce  is  vested  in  Congress.  Until  1870  little  use  was 
made  by  the  State  governments  of  this  power;  the  chief  aim 
of  the  w^estern  States  was  to  secure  railroad  facilities  and 
there  was  no  disposition  to  impose  restrictions  on  new  roads; 
competition  was  relied  upon  to  protect  the  public  from  abuses. 
In  the  early  seventies,  however,  partly  as  a  result  of  high 
rates  and  gross  discriminations  on  the  part  of  the  railways, 
and  partly  as  a  result  of  the  lower  prices  resulting  from  cur- 
rency contraction  and  the  crisis  of  1873,  the  farmers  of  the 
western  States  demanded  the  regulation  of  railway  rates. 
Illinois  began  the  movement  in  1870  by  the  establishment  of 
a  State  commission  with  powers  to  prescribe  maximum  rates, 
to  prohibit  discrimination,  and  to  regulate  the  railroads.  This 
example  was  followed  by  other  States  in  the  West  and  South 
—  Iowa,  Wisconsin,  Minnesota,  Georgia,  California,  etc.  The 
so-called  "  granger  "  legislation  of  this  period  was  extreme 
and   was  either  repealed  or  modified  in  a  few  years,  but   as 


S  IK  "5  i  :=  •; 


RAILROADS    AND    INTERNAL    COMMERCE  327 

a  result  of  this  restrictive  legislation  most  of  the  Mississippi 
Valley  States  and  those  of  the  South  to-day  have  mandatory 
railroad  commissions,  that  is,  commissions  with  power  to 
prescribe  and  enforce  maximum  rates. 

In  the  eastern  and  central  vStates,  railroad  commissions 
with  supervisory  powers  merely  have  been  created,  whose  duty 
it  is  to  investigate  and  make  public  all  charges  against  the 
railways.  Of  this  type  of  commission  the  best  example  is  that 
of  Massachusetts.  "  The  exceptions  to  this  general  practice 
are  significant.  Eight  Cordilleran  States  and  two  territories 
where  the  need  of  transportation  facilities  overrides  every 
other  consideration,  and  five  eastern  States  where  the  railroad 
interests  rule  the  legislatures,  have  as  yet  provided  no  super- 
vising commission."  ^  With  the  growth  of  the  great  railway 
systems  the  State  governments  have  become  clearly  inade- 
quate to  cope  with  the  problems  involved,  and,  while  the  state 
commissions  have  done  valuable  service,  broader  powers  of 
control  are  necessary.  These  can  be  exercised  only  by  the 
Federal  government. 

276.  Federal  regulation  of  rates.  —  Federal  legislation  on 
the  subject  of  railroads  dates  back  to  1866,  but  no  serious 
attempt  at  regulation  was  made  until  the  passage  of  the  Inter- 
state Commerce  Act  of  1887.  This  prohibited  discrimination, 
pooling,  a  greater  charge  for  a  short  than  for  a  long  haul, 
required  publicity  of  rates,  and  provided  for  a  commission  of 
five  persons,  to  whom  should  be  entrusted  the  investigation 
of  alleged  violations  of  the  act.  The  commission  sits  as  a 
tribunal  to  hear  complaints  and  render  decisions  upon  cases 
brought  before  it;  the  enforcement  of  its  decisions  is  secured 
through  the  courts,  to  w^hich  the  railroads  can  appeal  from 
the  commission.  According  to  the  original  act  the  findings 
of  the  commission  were  to  be  final  as  regards  matters  of  fact, 
but  in  1889  the  Supreme  Court  decided  that  new  evidence 
could  be  introduced  on  appeal,  and  has  thereby,  by  taking 
up    cases    de    novo,    greatly    lessened    the    authority   of    the 

1  Coman,  p.  324. 


:32S      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

commission.  It  has  likewise  modified  the  interpretation  of  other 
sections  of  the  act,  so  as  to  deprive  the  commission  of  most 
of  its  original  power.  Some  of  the  difficulties  in  the  Federal 
regulation  of  interstate  commerce  were  removed  by  the 
Klkins  and  Nelson  acts  already  referred  to,  while  the  Hep- 
burn Act  of  June  29,  1906,  goes  further  than  any  previous 
act  in  enlarging  the  powers  of  the  commission.  This  forbids 
the  granting  of  free  passes,  prohibits  railroads  from  carry- 
ing their  own  products,  places  private  car  lines,  etc.,  under 
the  control  of  the  commission,  and  provides  that  it  shall 
*'  determine  and  prescribe  what  will  be  the  just  and  reason- 
alile  rate  ";  the  final  control  over  rates  is,  however,  left  with 
the  courts. 

In  spite  of  its  limited  powers  the  Interstate  Commerce 
Commission  has  resulted  in  much  good;  by  its  numerous  de- 
cisions (about  1500)  it  has  developed  a  body  of  more  or  less 
authoritative  rules  for  the  regulation  of  railways;  the  right  of 
the  Federal  government  to  control  them,  at  first  disputed,  has 
now  l^een  thoroughly  established;  and  finally  there  has  been 
created  a  system  of  machinery  for  dealing  with  them  which 
can  easily  be. enlarged  or  entrusted  with  greater  powers  if  that 
seems  desirable.  The  principle  and  the  character  of  govern- 
mental regulation  of  railways  in  the  United  States  have  been 
determined,  and  the  problem  of  the  future  is  simply  how  far 
t  liat  cont  rol  shall  go. 

277.  Development  of  electric  interurban  railways.  —  The 
growth  of  elect  I'ic  railways  outside  of  cities  lielongs  almost 
entirely  to  the  period  since  1895,  and  has  reached  its  highest 
development  in  the  central  States  of  Ohio,  Michigan,  and 
Indiana.  Almost  7()()()  miles  of  such  lines  existed  in  1902, 
and  the  numl)er  has  grown  n.pidly  since  that  time.  The  roads 
possess  certain  advantages  over  steam  roads  which  have  made 
them  very  popular:  owing  to  the  fact  that  no  locomotives 
are  necessary,  the  cars  can  be  sent  off  singly  and  hence  fre- 
(\\wnt  i^ervice  is  possible;  frequent  stops,  with  comparatively 
high  speed,  are  also  made  possible  by  this  same  cause;  fares 


RAILROADS    AND   INTERNAL    COMMERCE.  329 

are  much  lower  because  of  the  greater  economy  of  construction 
and  operation.  The  convenience  of  tlie  trolley  has  greatly 
increased  the  amount  of  travel  in  the  districts  through  which 
they  have  been  built,  and  has  contributed  largely  to  the  inter- 
change of  business  between  the  cities  and  the  small  towns  and 
farms.  The  interurban  electric  lines  have  had  a  distinct  social- 
izing effect  upon  farm  life,  breaking  down  its  isolation,  intro- 
ducing higher  standards,  and  broadening  the  horizon  of  the 
country  dwellers.  They  afford  a  profitable  outlet,  by  means 
of  the  express  and  freight  trolley,  for  the  produce  of  the 
farm,  bring  the  superior  school  facilities  of  the  town  within 
reach  of  the  country  home,  and  render  the  markets  and 
shops  easily  accessible.  As  yet  the  possibilities  of  the  freight 
trolley  have  not  been  fully  exploited,  but  the  future  will 
doubtless  see  a  great  development  of  this  phase  of  their 
activity. 

278.  Canals  and  river  routes.  —  The  diversion  of  traffic  from 
the  canals  and  rivers  in  the  United  States,  which  l)egan  before 
the  Civil  War  and  proceeded  with  accelerated  speed  after  it, 
has  shown  no  signs  of  abatement.  Although  tolls  w^ere 
abolished  on  the  Erie  Canal  in  1882,  the  percentage  of 
the  entire  freight  movement  across  Xew  York  State  Avhich 
was  carried  on  the  canals  steadily  declined  —  to  12  per  cent, 
in  1890  and  5  per  cent,  in  1900.  Partly  responsible  for 
this  falling  off  was  the  absolute  decrease  in  the  amount  of 
lumber  and  forest  products  carried  across  the  State,  which 
had  generally  gone  by  the  slower  route;  but  more  important 
was  the  lack  of  improvements  in  ecjuipment  and  facilities. 
The  growing  traffic  in  grain  and  iron  was  di^•erted  almost 
completely  to  the  railroads,  which  meanwhile  had  made 
extensive  improvements.  The  vote  of  the  people  of  the 
State  of  Xew  York  in  1903  to  expend  $101,000,000  in 
deepening  and  improving  the  Erie  Canal  will  doubtless  re- 
store some  of  its  former  importance.  While  most  of  the 
canals  in  the  country  have  been  bought  up  by  the  railroads 
and   permitted  to  sink  into  .decay,  there  is  to-day  a  growing 


330      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

realization  of  their  usefulness  as  regulators  of  railroad  rates 
and  as  adjuncts  to  the  river  and  lake  routes  for  the  carriage 
of  heavy  and  bulky  traffic.  The  purchase  of  the  Panama 
Canal  for  $oO,0()().(K)()  by  the  United  States  government 
and  the  decision  to  build  an  isthmian  canal  emphasizes  this 
tendencv. 


Amehkan  .Stp:am  8hovp:l  at  Panama 
^^'hcn  completed  this  canal  will  he  extremely  important,  and  will 
chanjie  the  course  of  much  of  the  world's  trade.  Most  of  the 
throufih  trafhc  now  ^oing  hy  way  of  the  Straits  of  Magellan  will 
Ik'  diverted  to  the  Isthmian  route,  which  will  greatly  shorten  dis- 
tances. Between  New  York  and  Han  Francisco,  for  example,  there 
will  he  a  siiving  effected  over  the  existing  water  route  of  8000 
miles. 

The  river  traffic,  too,  has  been  cut  into  by  railroad  compe- 
tition, and  although  of  considerable  importance  still,  amount- 
ing to  some  30, ()()().()()()  tons  a  year  on  the  streams  of  the 
Mississippi  \'alley  alone,  it  has  declined  both  relatively  and 
absolutely.  A  third  of  the  Mississip})i  River  traffic  has  been 
diverted  to  the  railroads  in  the  last  twenty  years;  the  relative 


RAILROADS    AND    INTERNAL    COMMERCE 


331 


volume  of  traffic  by  river  and  rail  at  St.  Louis  and  New  Orleans 
is  shown  in  the  following  table: 


1880 


1890 


1900 


Tonnage  received  at  St.  Louis  by 

river,  tons 

Tonnage  received  at  St.  Louis  by 

rail,  tons 

Cotton  received  at  New  Orleans 

by  river,  bales 

Cotton,  received  at  New  Orleans 

by  rail,  bales 


893,860 
6,096,524 
1,087,522 
627,577 


530,790 
9,969,291 

425,828 
1,722,473 


512,000 

15,375,000 

343,450 

1,935,177 


By  1899  the  cotton  receipts  by  river  at  New  Orleans 
were  only  15  per  cent,  of  the  total  cotton  receipts  of  that 
place  as  against  64  per  cent,  in  1880,  showing  a  large  de- 
cline in  the  river  trade  of  the  most  important  staple  of  that 
region. 

279.  Lake  transportation. —^  The  commerce  on  the  Great 
Lakes,  alone  of  our  water-ways,  shows  an  immense  increase;  in 
1902  the  total  volume  of  freight  amounted  to  55,045,636  tons. 
The  proximity  of  the  lake  ports  to  important  areas  of  produc- 
tion, as  of  grain,  iron,  copper,  lumber,  and  similar  products, 
has  made  them  the  natural  highway  of  commerce  for  the  North- 
west. "  Several  factors  distinguish  the  commerce  of  the  Great 
Lakes  from  all  other  water-borne  traffic  in  which  American 
vessels  are  engaged.  ...  In  the  first  place,  the  carrying  trade 
of  the  Great  Lakes  not  only  embraces,  almost  exclusively,  raw 
material,  but  is  made  up  principally  of  a  limited  number  of 
commodities.  Secondly,  it  is  to  a  great  extent  a  through 
traffic  —  the  number  and  volume  of  cargoes  transported  from 
a  lower  to  an  upper  Lake  port,  so  called,  or  vice  versa,  greatly 
exceed  the  short  coastwise  hauls.  Coal,  both  anthracite  and 
bituminous,  is  shipped  from  the  various  ports  on  the  south 
shore  of  Lake  Erie  to  ports  on  Lakes  Superior  and  Michigan, 
while  flour  and  grain,  iron  ore,  copper,  and  lumber  make  the 


3:i'J      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

tri])  from  Lake  Superior  and  Lake  Michigan  ports  to  unloading 
docks  on  Lake  Lrie.'' 

The  tonnage  that  passes  through  the  St.  Mary's  Falls  canal. 
which  may  ])roix'rly  be  considered  as  a  link  in  the  chain  of 
lakes,  increased  from  1,734,890  tons  in  1880  to  36.617,699  in 
1905.  But  not  merely  has  the  tonnage  of  the  lake  fleet  in- 
croMscd:  the  size  and  capacity  of  the  vessels  engaged  in  the 


IRON  ORE  SHIPPING  ROUTES 

SCALE  OF  MILES 


Ikox  Ore  Shipping  Routes 
Tlif  iron  on-  from  the  Lako  Superior  mines  is  shipped  hy  l)oat  to 
('hicaj:;().  jiuffalo,  and  the  ports  on  southern  Lake  Eri^'.  Avh^n'  much 
of  it  is  sMU'hed.  A  lar<;e  part  is  shipped  furth(^r  by  rail  to  the  nianu- 
facturin^  eities  of  western  Pennsylvania  and  eastern  Ohio,  where 
coal  is  abundant. 


iak(;  commerce  has  more  than  kept  pace:  in  1905  a  dozen 
vessels  were  huilt  over  500  feet  in  length,  several  of  which  had 
a  capacity  of  10.000  tons.  These  were  all  steel  steamships; 
in  1SS6  there  were  only  6  steel  vessels  on  the  Great  Lakes;  in 
1.S99  tliere  were  296.  Almost  one  third  of  the  entire  tonnage 
of  the  country  is  on  the  lakes. 

280.   The  ocean  merchant  marine.  —  As  only  vessels  flying 


RAILROADS    AND    INTERNAL    COMMERCE 


333 


the  American  flag  can  engage  in  the  coastwise  trade  the  mer- 
chant marine  engaged  in  domestic  commerce  has  grown  steadily, 
keeping  pace  with  the  industrial  development  of  the  country. 
From  2,600,000  in  1880  the  tonnage  of  vessels  engaged  in  do- 
mestic trade  has  increased  to  over  5,700,000  in  1906.  Employ- 
ment has  thus  been  given  to  American  shipyards,  the  tonnage 


The  Kaiserin  Aikjuste  Victoria 
This  vessel  is  700  feet  long,  77  feet  wide,  and  54  feet  deep,  with  a 
gross  tonnage  of  25,000  tons  and  a  displacement  of  about  43,000 
tons.  She  has  accommodations  for  550  first-class,  350  second-class, 
300  third  class  and  2,300  steerage  passengers  —  making  altogether  a 
floating  city  of  no  inconsiderable  size.  Her  speed  is  about  18  knots, 
and  the  time  taken  in  crossing  the  Atlantic  Ocean  about  seven  days. 
With  great  depth  of  hold  for  freight  and  large  carrying  capacity  for 
passengers  this  type  of  steamship  expresses  the  modern  economic 
demands  in  combined  transatlantic  passenger  and  freight  service. 


of  vessels  built  having  doubled  in  the  past  twenty  years.  In 
this  branch  of  our  merchant  marine  the  steel  sailing  schooner 
has  been  able  to  hold  its  own  against  the  steamer,  owing  to 
economies  by  the  use  of  steam  in  manipulating  sails  and  in 
loading  and  unloading  cargoes.  Coal,  lumber,  cotton,  and 
similar  bulky  commodities,  constitute  the  chief  items  of  the 


334      ECONOMIC   HISTORY    OF    THE    UNITED   STATES 

coastwise  commerce,  but  even  in  the  carriage  of  these  articles 
the  competition  of  the  raih'oads  is  severely  felt. 

The  tonnage  of  vessels  engaged  in  the  foreign  trade  has 
meanwhile  continued  the  same  steady  decline  upon  which  it 
entered  with  the  outbreak  of  the  Civil  War.  From  1,352,810 
tons  in  1880  it  fell  off  to  826,694  tons  in  1900.i  On  the  oth6r 
hand,  foreign  vessels  with  a  tonnage  of  over  5,000,000  tons 
touch  annually  at  our  ports  and  carry  about  90  per  cent,  of 
the  foreign  commerce  of  the  United  States.  Since  the  Spanish- 
American  war,  however,  ship-building  has  taken  on  new  life; 
the  government  has  placed  orders  with  domestic  shipyards  for 
a  number  of  new  war  vessels,  and  at  the  same  time  private 
capital  has  entered  the  field  again.  In  1903  the  first  of  two 
immense  vessels,  630  feet  long,  with  a  gross  tonnage  of  22,000 
tons  each,  was  launched  at  New  London;  these  are  the  largest 
vessels  ever  built  in  the  United  States  and  are  designed  for 
trade  from  Seattle  to  the  Orient  in  connection  wdth  the  Great 
Northern  railroad.-  The  purchase,  too,  by  Mr.  J.  P.  Morgan 
of  the  Leyland  line  of  steamers  shows  that  we  may  expect 
a  growing  investment  of  American  capital  in  the  ocean  carry- 
ing trade  in  conjunction  with  our  systems  of  railroad  trans- 
portation. There  is  little  reason  to  doubt  that,  with  the  great 
development  of  our  iron  and  steel  industries,  the  near  future 
will  see  again  the  upbuilding  of  an  American  merchant  marine. 
By  1906  the  tonnage  of  vessels  engaged  in  foreign  trade  had 
increased  to  939.486  tons. 

281.  Means  of  communication.  —  Almost  as  necessary  as 
an  adequate  system  of  transportation  lines  for  carrying  on  our 
enormous  domestic  trade  are  the  means  of  communication  by 
\\hi('h  l)usiness  men  may  inform  themselves  of  industrial  con- 
ditions  and   direct   distant   enterprises.     Indeed,   without   the 

1  Even  ihifs  small  amount  is  said  to  exaggerate  our  strength.  Mr. 
Neall,  a  shipping  merchant  of  Philadelphia,  stated  before  the  Industrial 
(-onnnission  in  1900,  that  less  than  800,000  tons  were  suitable  for  trans- 
oceanic traffic.     Report  Ind.  Com.,  IV,   ItkS. 

-  One  of  these  vessels  was  subsequently  wrecked  in  Japan,  in  May,  1907. 


RAILROADS    AND    INTERNAL    COMMERCE  335 

telegraph  and  telephone  our  great  trusts  and  railroads  could 
not  be  conducted  along  existing  lines.  Improved  means  of 
transportation,  communication,  and  credit  have  combined  to 
make  possible  our  nineteenth-century  industry.  The  impor- 
tance of  the  telegraph  is  only  partially  indicated  by  the  number 
of  messages  sent,  which  have  more  than  trebled  in  the  last 
twenty  years  —  from  29,000,000  in  1880  to  about  100,000,000 
at  present.  The  business  is  completely  monopolized  by  two 
large  companies,  but  these  reach  practically  every  point  in  the 
United  States.  American  ingenuity  has  also  applied  teleg- 
raphy to  various  other  uses,  such  as  fire-alarm  boxes,  stock 
tickers,  district  messenger  service,  etc.  Ocean  cables  cross  the 
Atlantic  and  Pacific  Oceans  and  afford  speedy  communication 
with  every  part  of  the  world.  The  latest  and  most  important 
development  of  telegraphy,  the  so-called  ''  wireless,"  threatens 
now  to  supplant  the  cables,  and  has  already  been  adopted  for 
use  by  the  United  States  signal  service,  the  navy,  and  several 
steamship  lines. 

Of  more  general  service  for  short  distances  is  the  telephone. 
Up  to  1894-95  the  Bell  telephone  system  had  a  practical  mo- 
nopoly of  the  field,  but  when  its  patents  began  to  expire  inde- 
pendent telephone  exchanges  sprang  up  all  over  the  country, 
and  especially  in  the  middle  and  northwestern  States.  In 
1880  the  census  reported  54,319  receiving  telephones  in  the 
country;  in  1900  the  Bell  system  reported  1,080,000  sub- 
scribers, while  the  independent  exchanges  had  700,000  more. 
Taking  the  United  States  as  a  whole,  there  was  in  the  latter 
year  1  telephone  to  every  40  persons  of  the  population.  The 
expansion  of  the  postal  service  of  the  country  was  equally 
striking:  from  42,989  post-offices  in  1880,  the  number  grew  to 
76,688  in  1900;  in  the  latter  year  the  post-office  handled  nearly 
14,000,000,000  pieces  of  mail  matter.  The  establishment  of 
the  system  of  rural  free  mail  delivery,  together  with  the  tele- 
phone and  trolley  line,  has  done  much  to  break  down  the  rural 
isolation  of  many  agricultural  districts  and  to  improve  the 
farmers'  condition.     Improved  means  of  transportation  have 


336      ECONOMIC   HISTORY    OF    THE    UNITED   STATES 

been  accompanied  too  by  a  growth  in  the  number  of  books, 
newspapers,  etc.,  as  it  lias  been  one  of  the  main  factors  in  their 
speedy  and  economical  distribution.  The  newspapers  of  the 
United  States  have  increased  from  9723  in  1880  to  23,146  in 
1905. 

SUGGESTIVE  TOPICS  AND  QUESTIONS.     CHAPTER  XXIII 

I.  Why  are  discriminations  granted  by  railroads?     Do  you  know  of 
/     any  cases  where  this  was  done?     [Industrial  Com.  Rep.,  IV,  5-7:  Parsons, 

/       Heart  of  the  Railroad  Problem,  17,  23.] 

I  2.    Is  any  provision  made  by  the  railroads  for  indemnifying  employees 

/      who  meet  with  accidents  while  in  their  service?     [5th  An.  Rep.  U.  S.  Dept. 

I       oi  Lab.,  1889;  Industr.  Com.  Rep.,  XVII,  867-890;  H.  C.  Adams,  Slaughter 

'        of  Railway  Employees,  in  Forum,  XIII,  500.] 

3.  What  is  pooling?  Should  it  be  permitted?  [Hadley,  74,  91,  143; 
Johnson,  228-243,  256;  Noyes,  Amer.  Railroad  Rates,  146.] 

4.  What  is  meant  by  a  business  of  "increasing  returns"?  Is  the 
railroad  a  business  of  this  kind?  [Adams,  Sci.  of  Fin.,  394;  Marshall, 
Princ.  of  Econ.  book  4,  chap.  3.] 

5.  Do  the  electric  interurban  lines  seriously  compete  with  the  steam 
railroads  in  your  home?  What  has  been  the  effect?  [R.  Morris,  Trolley 
System  in  Ohio,  in  Atl.  Mo.  XCIII.  730;  F.  T.  Carleton,  The  Electric 
Interurban  Railroad,  in  Yale  Rev.,  Aug.,  1904,  p.  179;  Street  and  Electric 
Rys.,  1902.  (Spec.  Rep.  of  Census  Office),  110,  116;  Bogart,  Social  and 
Economic  Effects  of  the  Electric  Interurban  Railway,  in  Journ.  of  Pol. 
Va-ou.,  Dec,  1906.] 

6.  What  objections  are  there  to  the  granting  of  passes  to  public 
officials?  to  private  individuals? 

7.  What  was  the  so-called  granger  legislation?  Why  was  it  passed 
and  what  ett'ects  did  it  have?  [C.  F.  Adams,  The  Granger  Movement,  in  No. 
Amer.  Rev.,  CXX,  394;  Moody,  Land  and  Lab.,  chap.  3;  Martin,  part  6.] 

S.  ^^'ill  the  opening  of  the  Panama  Canal  probably  have  any  effect  on 
existing  routes  of  commerce?  On  railroad  rates?  Has  its  construction 
))een  opposed  by  any  interests?     [Trotter,  377;  Adams,  Com'l  Geog.,  44.] 

9.  Compare  the  shipping  through  the  "Soo"  and  the  Suez  Canals; 
which  is  the  larger  and  why? 

10.  Do  you  think  the  canals  in  the  United  States  should  be  improved 
and  enlarged?  [.lohn.son,  Inland  Waterways;  John.son,  Ocean  and  Inland 
^\■at(•r  Transp.,  chap.  24,  25.] 

II.  Should  subsidies  be  granted  by  the  government  to  build  up  the 
American  merchant  marine?  [Marvin,  chap.  IS;  McVey,  Frye  Subsidy 
liill,  in  Vale  Rev.,  II,  38.] 


RAILROADS    AND    INTERNAL    COMMERCE  .  337 

12.  Describe  the  "shipping  trust."  [Gunsburg,  The  Atl.  Shipping 
Combine,  in  Econ.  Journ.  XIII,  197;  Meade,  Capitahzation  of  the  Internat'l 
Merch.  Mar.  Co.,  in  Ripley,  Trusts,  Pools,  and  Corps.,  chap.  6;  Chamberlain, 
The  New  Cunard  Steamship  Contract,  in  No.  Amer.  Rev.,  CLXXVII,  533.] 

13.  Foreign-built  vessels  cannot  now  be  admitted  to  American  regis- 
try; do  you  think  the  pohcy  of  "free  ships"  would  be  better?  [Wells, 
Our  Merch.  Mar.,  209;  Kelley,  Question  of  Ships,  chap.  5;  Bates,  Amer. 
Mar.,  52-54,  375-8.] 

14.  Discuss  the  importance  of  good  wagon  roads,  and  the  recent 
good  roads  movement.  [J.  W.  Jenks,  Road  Legislation  for  the  American 
State,  in  Publ.  Amer.  Econ.  Ass.,  vol.  4,  no.  3;  Shaler,  Amer.  Highways, 
chap.  13;  Trotter,  139.] 

15.  What  has  made  Chicago  the  largest  railroad  center  in  the  world? 
[Rocheleau,  Geog.  of  Com.  and  Ind.,  221-9;  Trotter,  53-4,  114-5,  143; 
Adams,  Com.  Geog.,  152-3.] 

16.  Why  are  the  following  cities  important  —  Duluth,  Buffalo,  Pitts- 
burg, Galveston?  [Rocheleau,  chaps.  18,  19;  Adams,  Com.  Geog.,  95, 
152-3,  155-7;  Trotter  (Index).] 

17.  What  improvements,  if  any,  could  be  made  in  the  postal  service? 
[Gushing,  The  Story  of  Our  P.  O.;  Hyde,  A  Hundred  Years  by  Post; 
Cowles,  a  General  Freight  and  Passenger  Post;  Bliss,  Ency.  Soc.  Ref.,  art. 
Postal  Savings  Banks.] 

18.  Should  the  telegraph  be  owned  and  operated  by  the  Federal 
government?  [Bliss,  Ency.  Soc.  Ref.,  art.  Telegraph;  Hubbard  and 
Green,  in  No.  Amer.  Rev.,  CXXXVII,  422-434,  521-535;  Means,  in  No. 
Amer.  Rev.,  CXXXIX,  51-66;  Parsons,  in  Arena,  Jan.,  1896.] 

SELECTED  REFERENCES.     CHAPTER  XXIII 

** Industrial  Commission  Report,  vols.  4,  10,  17,  19. 

** Interstate    Commerce    Commission:    Reports,    and    Statistics    of 

Railroads. 
*Johnson:  American  Railway  Transportation,  28-33,  213-257. 
*Marvin:  American  Merchant  Marine,  chaps.  16,  18. 
*Meyer:  Railway  Legislation  in  the  United  States. 
*Shaler:  American  Highways,  chap.  13. 

Bates:  American  Marine,  chaps.  17,  27. 

Dixon:  State  Railroad  Control. 

Johnson:  Ocean  and  Inland  Water  Transportation. 

Leroy-Beaulieu :  The  United  States  in  the  Twentieth  Century,  Part  4. 

Parsons:  Heart  of  the  Railroad  Problem. 


23 


CHAPTER  XXIV 

CURRENCY   AND   BANKING    (i860- 1906) 

282.  The  issue  of  legal  tender  notes.  —  The  monetary  his- 
tory of  the  United  States  in  the  period  beginning  with  the 
Civil  War  is  so  important  and  so  intimately  connected  with  the 
economic  history  of  the  time  that  it  becomes  necessary  at  this 
point  to  treat  the  subject  of  currency  and  banking  with  greater 
fulness  than  has  until  now  been  thought  desirable.  The  issue 
of  legal  tender  paper  money  by  the  government,  the  establish- 

7ment  of  the  national  banking  system,  and  the  silver  legislation 
^  had  far-reaching  economic  effects  upon  industry,  wages,  and  the 
distribution  of  wealth,  as  well  as  striking  financial,  political,  and 
social  results.  The  connecting  principle  unifying  the  monetary 
history  of  the  United  States  during  the  thirty-five  years  after  the 
Civil  War  was  a  persistent  demand  for  more  money,  and  the  en- 
deavor to  force  the  Federal  government  to  supply  it.  Public 
attention  was  successively  directed  to  paper  money,  to  silver,  and 
finally  to  bank-notes  as  the  best  method  of  meeting  this  need. 
Only  recently  has  a  better  appreciation  of  the  laws  of  money  and 
of  the  use  of  credit  aided  in  the  partial  solution  of  the  problem. 
From  the  adoption  of  the  Constitution  to  the  Civil  War 
the  United  States  government  had  never  issued  paper  money; 
gold  and  silver  alone  had  been  made  legal  tender,  and  after 
the  final  establishment  of  the  independent  treasury  system  in 
1^4n  they  alone  had  been  used  by  the  government  in  its  finan- 

-)  cial  dealings.  But  soon  after  the  outbreak  of  the  war  the 
necessities  of  the  treasury  department  led  to  the  issue  of  legal 
tender  paper  money  directly  by  the  government,  to  a  total 
amount  of  $4 50. ()()(), 000.  At  the  time  these  notes  were  first 
issued  the  whole  country  was  using  l)ank-notes  issued  by  some 

338 


CURRENCY    AND    BANKING 


339 


sixteen  hundred  banking  institutions,  in  addition  to  gold  and 
silver.  Owing  chiefly  to  unwise  action  on  the  part  of  the 
treasury  department,  specie  payments  had  been  suspended  by 
both  the  banks  and  the  treasury  at  the  end  of  1861.  The 
United  States  notes,  therefore,  were  not  redeemable  in  coin, 
but  were  true  inconvertible  paper  money.  The  denomination 
of  the  lowest  notes  issued  was  steadily  reduced  from  $10  in 
the  first  to  $5  in  the  second,  and  finally  to  $1  in  the  third 
issue,  while  subsequently  provision  was  made  for  fractional 
paper  currency,  so  that  within  two  years  from  the  commence- 
ment of  the  war  the  country  w^as  completely  provided  with  a 
paper  currency  issued  directly  by  the  government. 

283.  Financial  effects.  —  One  of  the  first  effects  of  the  issue 
of  United  States  notes  or  greenbacks  was  their  depreciation  or 
fall  in  value,  with  an  accompanying  rise  in  the  prices  of  com- 
modities, and  a  fluctuating  premium  on  gold.  The  deprecia- 
tion of  the  currency  was  increased  by  the  expansion  of  bank 
issues  and  deposits,  and  was  influenced  by  the  success  of  the 
Union  army,  but  in  general  was  proportioned  to  the  inflation 
produced  by  over-issue.  The  following  table  ^  show^s  the  de- 
preciation of  the  currency  by  months,  measured  in  gold: 


Month 

1862 

1863 

1864 

1865 

$98 
97 
98 
98 
97 
94 
87 
87 
84 
78 
76 
76 

$69 
62 
65 
66 
67 
69 
77 
79 
74 
68 
68 
66 

$64 
63 
64 
58 
57 
47 
39 
39 
45 
48 
43 
44 

$46 

February   .            ... 

49 

March 

April 

May 

57 
67 
71 

June 

July          

74 
70 

August 

70 

September 

October 

69 
69 

November   

December 

68 
68 

Dewey,  Financial  History  of  the  United  States,  p.  293. 


340      ECONOMIC    HISTORY    OF    THE    UNITED   STATES 

^  While  the  issue  of  greenbacks  was  justified  on  the  ground  of 
the  financial  necessity  of  relieving  the  treasury  from  its  em- 
barrassments, the  final  cost  of  the  war  was  immensely  increased 
by  their  use.  Owing  to  the  depreciation  of  the  greenback  the 
government  was  compelled  to  pay  higher  prices  for  commod- 
ities and  labor,  while  the  returns  from  bonds,  measured  in  gold, 
steadily  fell  off,  though  the  nominal  price  remained  high.  In 
both  these  ways,  therefore,  there  was  a  great  increase  in  the 
J  cost  of  conducting  the  war;  the  total  effect  has  been  estimated 
\  at  between  $528,000,000  and  $617,000,000.  But  in  addition 
to  this  direct  and  calculable  increase  there  were  other  in- 
direct effects,  such  as  the  greater  extravagance  of  Congress 
in  appropriations  induced  by  the  easy-going  paper  money 
policy. 

284.  Economic  effects.  —  Large  as  was  the  financial  addi- 
tion to  the  cost  of  the  war  to  the  government  as  a  result  of  the 
issue  of  greenbacks  it  was  small  when  compared  with  the 
burdens  imposed  upon  the  people  in  their  private  business 
relations  by  inflated  prices.  The  increase  in  relative  prices 
and  wages  during  the  war,  according  to  the  Aldrich  report, 
was  as  follows: 


Year 

Prices 
Simple  Averages 

Money  Wages 
Simple  Averages 

Real  Wages 
Simple  Averages 

1860    

1861    

1862    

1863    

1864    

1865    

1860    

100.0 
100.6 
117.8 
148.6 
190.5 
216.8 
191.0 

100.0 
100.8 
102.9 
110.5 
125.6 
143.1 
152.4 

100. 

100. 
87 
74 
66 
66 
79 

It  is  evident  from  this  table  that,  if  we  take  the  year  1860 
as  the  base  and  call  general  prices  in  that  year  100,  general 
])rices  continued  to  rise  steadily  during  the  war.  The  rise 
affected  various  articles  very  differently,  however,  as  the  price 


CURRENCY    AND   BANKING 


341 


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342      ECONOMIC   HISTORY    OF    THE    UNITED    STATES 

of  some  of  them  increased  much  more  rapidly  than  of  others; 
agrieiihural  products  did  not  advance  as  quickly  or  as  much 
as  manufactured  commodities.  Wages  lagged  far  behind 
prices  in  obedience  to  a  general  economic  law,  and  the  real 
wages  of  the  laborers  of  the  country  were  accordingly  greatly 
reduced.  This  entailed  discontent,  labor  disputes,  and  often 
nuich  real  hardship  and  suffering.  The  issue  of  paper  money 
acted  like  a  tax  upon  the  people,  but  a  most  unfair  tax  and 
one  for  which  there  was  no  commensurate  return  to  the  gov- 
ernment. In  so  far  as  the  government  was  an  employer  of 
labor  there  was  a  certain  saving  at  the  expense  of  the 
workers,  but  this  was  more  than  offset  by  the  loss  of  the 
most  efficient  empl()3'ees.  The  wages  of  the  soldiers  remained 
at  $13  a  month  until  May  1,  1864,  when  it  was  raised  to  $16, 
a  change  which  fell  far  short  of  the  actual  increase  in  the 
cost  of  living.  In  general,  workingmen  were  able  in  time 
to  secure  advances  in  their  wages,  especially  in  the  better 
organized  trades;  in  some  cases,  however,  as  that  of  school- 
teachers, ministers,  and  salaried  persons  in  general,  it  was 
difficult  to  make  both  ends  meet.  To  some  extent  it  was 
possible  to  obviate  the  pressure  of  higher  prices  by  substitut- 
ing some  lower-priced  article  for  the  more  expensive  one,  but 
in  so  far  as  this  necessitated  a  lowering  of  the  standard  of 
living,  it  was  a  most  regrettable  result  of  the  paper  money 
policy. 

285.  Contraction  and  resumption  of  specie  payments.  — 
Upon  the  conclusion  of  the  war,  it  was  thought  that  the  green- 
backs, whose  issue  had  been  advocat3d  as  a  temporary  measure, 
would  be  withdrawn  and  specie  payments  resumed.  In  1866 
the  policy  of  retiring  a  certain  amount  of  the  greenbacks 
monthly  was  begun,  and  continued  until  the  total  amount 
outstanding  had  been  reduced  to  $356,000,000;  at  this  point 
Congress  prohibited  the  further  retirement  of  the  notes  by  act 
of  February  4,  1868.  The  rise  in  the  value  of  the  greenback 
and  the  reorganization  of  business  after  the  conclusion  of  peace 
had  brought  about  a  commercial  depression,  which  was  popu- 


CURRENCY    AND    BANKING  343 

larly  attributed  to  the  policy  of  contraction.  Many  persons 
now  began  to  demand  that  the  greenbacks  should  not  be  re- 
tired, but  should  be  retained  as  a  permanent  part  of  our  mone- 
tary system.  During  the  serious  panic  of  1873,  heavy  pressure 
was  brought  to  bear  upon  the  Treasury  to  relieve  the  banks 
and  the  business  community,  by  reissuing  the  greenbacks 
which  had  been  accumulated  but  not  destroyed;  accordingly, 
the  Secretary  reissued  $26,000,000  in  exchange  for  bonds. 
The  clamor  for  cheap  paper  money  now  became  louder,  and  in 
1874  resulted  in  the  passage  by  Congress  of  the  inflation  bill, 
providing  for  the  increase  in  the  issue  of  greenbacks  to  $400,- 
000,000.  When  this  was  vetoed  by  President  Grant,  the 
amount  was  fixed  at  the  circulation  then  outstanding  — 
$382,000,000. 

The  agitation  for  an  irredeemable  paper  currency  led  in- 
1876  to  the  formation  of  the  National  Greenback  Party,  which 
reached  its  greatest  strength  in  1878,  when  it  polled  over 
1,000,000  votes,  chiefly  in  the  newer  West  and  South.  Before 
this,  however,  the  Republican  Party  had  passed  the  Resump- 
tion Act  of  January  14,  1875,  which  provided  for  the  accumu- 
lation of  a  gold  reserve  from  surplus  revenues  and  the  sale  of 
bonds,  for  the  purpose  of  redeeming  the  greenbacks;  provision 
was  also  made  for  a  partial  retirement  of  these  notes.  Before 
the  plan  could  be  carried  through  Congress  again  interfered, 
in  1878,  to  check  the  policy  of  contraction,  and  by  the  act  of 
May  31  fixed  the  amount  of  greenbacks  at  the  number  in 
circulation  on  that  day,  $346,681,016,  at  which  point  it  has 
ever  since  remained.  The  resumption  of  specie  payments  was 
rendered  certain  by  the  accumulation  of  a  gold  reserve  of 
$133,000,000,  w^hich  a  fortunate  increase  in  our  grain  exports 
enabled  us  to  keep  and  enlarge.  On  January  1,  1879,  the 
Treasury  began  the  redemption  of  greenbacks  in  gold.  Owing 
to  the  provisions  of  the  law,  however,  the  greenbacks,  when 
redeemed,  were  not  to  be  destroyed,  but  "  must  be  reissued." 
They  remained,  therefore,  a  permanent  part  of  our  money 
supply. 


344      ECONOMIC   HISTORY    OF    THE    UNITED   STATES 

^  286.  The  national  banking  act.  —  When  the  war  broke  out 
the  circiihiting  medium  of  the  country  consisted  of  coin  and  of 
bank-notes.  These  notes  were  issued  by  some  sixteen  hundred 
institutions,  operating  under  State  laws,  and  had  only  a  local 
circulation  at  best,  while  many  of  them  were  nearly  worthless. 
To  replace  these  and  provide  a  safe  national  currency  of  uni- 
form value  was  highly  desirable,  and  was  one  of  the  causes 
which  led  to  the  establishment  of  the  national  banking  system. 
More  important  was  the  necessity  of  finding  a  market  for  the 
United  States  bonds,  whose  sale  formed  the  chief  reliance  of 
the  government  for  carrying  on  the  war.  To  secure  this  end 
it  was  proposed  to  require  the  banks  to  base  their  note  issues 
uj)()n  government  bonds.  This  plan  was  carried  out  by  the 
act  of  February  25,  1863. 

The  characteristic  point  in  the  new  system  was  the  pro- 
vision that  the  banks  organizing  under  a  Federal  charter  must 
buy  United  States  bonds  and  deposit  them  with  the  govern- 
ment; they  were  then  permitted  to  issue  bank  notes  up  to 
ninety  per  cent,  of  the  par  value  of  the  bonds.  Other  provi- 
sions regulated  the  capital,  the  liability  of  stockholders,  the 
amount  of  reserve,  examination  of  accounts,  etc.  Owing  to 
the  slowness  with  which  banks  came  into  the  system,  the 
issue  of  notes  by  State  banks  was  prevented  by  a  tax  of  10  per 
cent,  annually  (act  of  March  3,  1865).  A  monopoly  of  note- 
issue  was  thus  secured  to  the  national  banks.  The  other 
functions  of  banking  were  left  open  to  banks  chartered  by 
State  authority  and  to  private  banks. 

287.  History  of  the  national  banking  system.  —  The  circu- 
lation of  the  national  banks  did  not  increase  as  rapidly  as  had 
been  expected;  in  1873,  when  high-water  mark  was  reached, 
the  outstanding  circulation  amounted  to  only  $339,000,000. 
This  failure  to  expand  was  chiefly  due  to  the  rapid  rise  in  the 
price  of  government  bonds,  which  made  it  more  profitable  to 
the  banks  to  sell  the  bonds  at  a  profit  and  retire  their  notes, 
than  to  hold  the  bonds  and  keep  their  notes  in  circulation. 
By  1876  the  circulation  had  been  reduced  to  $291,000,000,  and 


CURRENCY    AND    BANKING  345 

while  it  increased  somewhat  during  the  next  few  years,  a  steady 
decline  set  in  about  1883  which  continued  uninterruptedly 
until  the  bank-note  circulation  had  declined  to  $168,000,000  in 
1891.  This  shrinkage  was  brought  about  largely  by  the  pay- 
ment of  the  national  debt  as  it  fell  due  and  the  consequent 
retirement  of  the  bonds  on  which  the  notes  were  based.  An 
effort  was  made  in  the  act  of  July  12,  1882,  to  make  the  con- 
ditions of  note-issue  more  profitable  to  the  banks,  but  the 
hostility  to  the  national  banks  was  still  so  great  that  little  was 
done. 

During  the  next  two  decades  various  proposals  were  made 
to  secure  a  larger  and  more  elastic  note-issue:  the  repeal  of  the 
tax  on  circulation;  funding  of  the  outstanding  United  States 
bonds  into  other  bonds  bearing  a  lower  rate  of  interest  and 
running  for  a  longer  time;  deposit  of  approved  State  or 
municipal  bonds  instead  of  national  bonds;  issuance  of  notes 
by  banks  on  their  general  credit,  to  be  secured  by  a  general 
safety  fund,  to  which  all  the  national  banks  should  contribute. 
There  was,  however,  no  further  legislation  upon  the  subject, 
and  with  the  steady  reduction  of  the  debt  it  seemed  as  though 
the  national  bank-note  circulation  would  soon  have  to  dis- 
appear. But  the  act  of  March  14,  1900,  gave  a  new  lease  of 
life  to  the  system:  circulation  might  be  issued  to  the  full  face 
value  of  the  bonds  deposited;  part  of  the  existing  national  debt 
was  to  be  refunded  in  new  two  per  cent,  thirty  year  bonds',  and 
upon  all  new  circulation  based  on  these  bonds  the  tax  was 
reduced  from  one  to  one  half  per  cent,  per  annum.  At  the 
same  time  that  note  issue  was  made  more  profitable,  the  mini- 
mum amount  of  capital  was  reduced  from  $50,000  to  $25,000 
in  towns  with  a  population  not  exceeding  3000.  These  in- 
ducements led  to  a  considerable  increase  in  the  number  of 
national  banks,  as  well  as  to  an  increased  circulation.  Little 
was  done  by  the  act,  however,  to  make  the  monetary  system 
more  elastic,  while  the  final  reform  of  the  national  bank- 
ing system  was  simply  postponed  for  a  generation.  The  fol- 
lowing table  presents  a  few^  of  the  more  important  statistical 


346      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

facts  relative  to  all  banks  for  the  year  ending  September  1, 
1905: 


Kind  of  Banks 

Number 

Capital 

Deposits 

Circulation 

National 

State            

5505 

7794 

683 

1237 

1028 

$776,175,576 

379,756,040 

243,133,622 

26,191,294 

22,518,193 

$3,989,522,835  ' 

2,365,209,630 

1,980,856,737 

3,093,077,357 

127,937,098 

$485,521,671' 

Loan  &  Trust  Co.s. 

Sa  vino's       .... 

Private 

Total 

16247 

$1,447,774,725 

$11,556,603,657 

$485,521,671 

288.  The  demonetization  of  silver.  —  In  response  to  a  sug- 
gestion made  at  the  international  monetary  conference,  held 
in  Paris  in  1867,  a  movement  was  begun  in  the  United  States 
in  1869  to  revise  the  mint  laws.  These  had  not  been  changed 
since  1837,  and  some  of  the  coins  had  become  obsolete.  A  bill 
was  accordingly  prepared  by  the  deputy  comptroller  of  the 
Treasury,  submitted  to  experts  for  advice,  and  introduced 
into  the  Senate  on  April  2b,  1870.  After  debating  the  measure 
for  five  sessions  Congress  finally  enacted  it  into  law,  February 
12,  1873.  The  most  important  provision  of  the  act  was  the 
section  dropping  the  standard  silver  dollar  from  the  list  of 
coins  to  be  coined  by  the  United  States.  At  the  time  the  act 
attracted  little  attention,  for  we  were  using  neither  silver  nor 
gold  then,  greenbacks  and  national  bank-notes  being  the  only 
forms  of  money  in  circulation.  Not  only  that,  but  for  forty 
years  the  silver  dollar  had  not  been  in  circulation,  as  the  bullion 
in  a  silver  dollar  was  worth  about  $1.02  in  gold,  and  it  was 
therefore  more  profitable  to  melt  up  the  silver  dollars  than  to 
keep  them  in  circulation.  In  the  seventy-nine  years  since  the 
establishment  of  the  mint  in  1792  only  8,031,238  silver  dollars 
had  been  coined  and  not  one  of  these  was  in  circulation. 

A  number  of  causes  soon  combined  to  bring  the  demone- 

1  November  9,  1905. 


CURREXCY    AXD    BAXKING 


347 


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348      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

tization  of  silver  to  general  notice.  The  adoption  of  the  gold 
standard  and  the  sale  of  her  silver  by  Germany  (1870-71),  the 
limitation  of  the  coinage  of  silver  by  the  Latin  Union  (1873), 
the  demonetization  of  silver  in  Holland  and  the  Scandinavian 
peninsula  (1875),  together  with  a  great  increase  in  silver  pro- 
duction from  newly  discovered  mines  in  Nevada,  brought 
about  a  fall  in  the  price  of  silver.  By  1876  the  silver  dollar 
was  worth  only  ninety  cents,  and  the  inflationists  who  desired 
more  money,  defeated  in  their  efforts  to  secure  the  issue  of 
additional  greenbacks,  began  to  demand  the  coinage  of  silver, 
In  this  demand  they  were  strongly  seconded  by  the  silver 
mine  owners,  who  were  bringing  a  largely  increased  supply  to 
a  falling  market.  There  were  also  many  who  thought  that  the 
panic  of  1873  and  the  prolonged  stringency  in  the  money 
market  was  due  to  the  "  crime  of  1873,"  and  who  honestly 
believed  that  the  country  needed  more  money  in  circulation. 
As  a  result  of  these  causes  there  began  about  1876  a  vigorous 
agitation  for  the  "  remonetization,"  or  free  coinage,  of  silver. 
289.  The  Bland-Allison  Act  of  1878.  —  Under  the  leader- 
ship of  Mr.  Bland,  an  ardent  advocate  of  silver,  a  bill  was  passed 
by  the  House  of  Representatives,  November  5,  1877,  providing 
for  the  free  and  unlimited  coinage  of  silver  at  the  ratio  of  16  to  1. 
In  the  Senate,  where  the  free  coinage  sentiment  was  not  so 
strong,  it  was  amended  so  as  to  provide  for  the  coinage  of  a 
limited  amount  of  silver,  and  in  this  form  finally  became  law, 
February  28,  1878.  The  act  provided  for  the  purchase  of 
silver  bullion  by  the  Secretary  of  the  Treasury,  not  less  than 
$2,000,000  nor  more  than  $4,000,000  worth  per  month,  and  its 
coinage  into  silver  dollars  of  412l  grains.  Provision  Avas  also 
made  for  the  issue  of  silver  certificates  in  denomination  of  $10 
and  upwards,  upon  deposit  of  silver  dollars.  As  it  was  found 
impossible  to  keep  more  than  a  small  part  of  the  silver  dollars 
in  circulation,  the  lowest  denomination  of  the  silver  certificates 
was  reduced  in  1886  to  $1,  and  in  this  form  most  of  the  silver 
purchased  went  into  circulation.  The  minimum  amount  of 
silver  provided  by  the  law  was  purchased  each  month;  this 


CURRENCY    AND    BANKING  349 

resulted  in  an  average  increase  in  the  circulating  medium  of 
the  country  of  about  $30,000,000  per  annum.  During  the 
twelve  years  of  the  operation  of  the  Bland-Allison  Act  there 
were  coined  378,166,000  silver  dollars. 

We  have  seen  that  the  amount  of  greenbacks  had  been 
permanently  fixed  in  1877,  and  that  the  national  bank-note 
circulation  steadily  declined  during  the  eighties.  As  the  in- 
dustrial development  of  the  country  was  proceeding  during 
this  period  at  an  unprecedented  rate,  with  the  exception  of  the 
short  depression  of  1884,  it  is  probable  that  this  addition  to 
our  money  supply  merely  kept  pace  with  our  growing  needs. 
It  is  probably  also  true  that  if  this  silver  had  not  been  coined 
its  place  would  have  been  filled  largely,  if  not  wholly,  by  the 
importation  of  gold. 

290.  The  Sherman  Act  of  1890.  —  By  1890  the  silver  ad- 
vocates were  strong  enough  to  force  more  favorable  action  in 
Congress,  and  on  July  14  of  that  year  they  secured  the  passage 
of  the  so-called  Sherman  Act.  This  provided  for  the  purchase 
by  the  Secretary  of  the  Treasury  of  4,500,000  ounces  of  silver 
each  month,  and  the  issuance  in  payment  therefor  of  treasury 
notes  of  full  legal  tender  character.  These  notes,  which  were 
based  upon  deposit  of  silver  bullion,  were  nevertheless  made 
redeemable  in  either  gold  or  silver  coin.  The  amount  of  silver 
purchased  under  this  act  was  almost  double  that  required  by 
the  silver  act  of  1878,  amounting  to  about  $50,000,000  per 
annum.  During  the  three  years  of  its  operation,  until  its 
repeal  on  November  1,  1893,  there  were  issued  $155,931,002  in 
treasury  notes.  If  the  additions  to  the  currency  under  the 
previous  law  were  sufficient,  the  increased  supply  forced  upon 
the  country  by  the  Sherman  Act  was  too  much.  Gold  began 
to  be  crowded  out  of  circulation;  in  the  first  six  months  of  1891 
over  $70,000,000  in  gold  was  exported  from  the  United  States. 
Much  of  this  gold  was  drawn  from  the  Treasury,  and  the  gold 
reserve,  which  had  been  created  under  the  resumption  act  for  thr 
redemption  of  greenbacks,  was  reduced  by  June,  1891,  to  $118; 
000,000;  by  January,  1894,  it  had  fallen  below  $68,000,000. 


350      ECONOMIC   HISTORY    OF    THE    UNITED    STATES 

Doubts  soon  began  to  be  entertained  as  to  the  ability  of  the 
government  to  redeem  its  promises,  and  the  presentation  of 
greenbacks  and  treasury  notes  at  the  treasury  for  redemption 
in  gold  began  on  an  unprecedented  scale.  At  the  same  time 
the  revenues  of  the  government  were  greatly  reduced  by  the 


k 

'--Siilnl^JT^^*'^           Jbiu: 

i^^ 

Gold  Dredge 
The  picturesque  miner  with  his  old  fashioned  pan  has  given  place  on 
most  of  the  western  rivers,  where  gold  is  found,  to  the  gold  dredge. 
This  machine  works  its  way  up  a  stream,  sucking  up  the  gold-bearing 
sand  before  it  by  hydraulic  pressure  if  it  is  fine  enough,  otherwise 
digging  up  the  earth  and  gravel  by  a  continuous  chain  of  buckets. 
After  the  gold  has  been  separated  from  the  gravel,  the  latter  is 
dumped  behind  the  boat  or  on  either  side.  A  dredge  will  work  to 
forty  feet  below  the  water  line,  and  will  stack  tailings  forty  feet 
above  it,  treating  100  to  120  tons  an  hour.  Farmers  complain  of 
the  disfigurement  of  the  stream,  the  frequent  diversion  of  its  course, 
and  the  destruction  of  the  soil  on  either  side,  as  results  of  dredging. 

passage  of  the  McKinley  and  Wilson  tariff  bills,  while  extrava- 
gant appropriations  on  the  part  of  Congress  prevented  the 
accumulation  of  funds  to  meet  this  drain.  Partly  as  a  result 
of  these  causes,  but  more  especially  as  the  result  of  over-specu- 
lation, inflated  credit,  and  over-investment  of  capital  in  risky 
enterprises,  the  panic  of  1893  broke  upon  the  business  world. 


CURRENCY    AND    BANKING  351 

291.  The  panic  of  1893.  —  The  financial  crisis  of  1893  was 
one  of  the  most  severe  the  country  had  ever  experienced;  trade 
and  industry  were  disorganized,  and  every  department  of  in- 
dustrial life  was  affected.  The  price  of  silver  fell  greatly,  owing 
to  the  closing  of  the  India  mints;  western  silver  mines  were 
shut  down,  and  their  employees  thrown  out  of  work.  During 
the  year  573  banks  and  banking  institutions  failed,  mostly  in 
the  West  and  South.  Gold  and  other  forms  of  currency  were 
hoarded  and  a  premium  of  4  per  cent,  was  offered  by  money- 
brokers  for  cash.  Commercial  failures  increased  greatly;  from 
4171  in  the  six  months,  April  1  to  October  1,  1892,  they  grew 
to  8105  during  the  same  period  in  1893,  with  liabilities  of 
$284,663,624,  as  against  $41,110,322  in  the  previous  year. 
Several  important  railroad  systems  —  the  Philadelphia  and 
Reading,  the  Erie,  the  Northern  Pacific,  and  the  Union  Pacific 
—  failed;  one  fourth  of  the  railway  capital  of  the  country  was 
in  the  hands  of  receivers;  earnings  fell  off  and  new  construction 
was  suspended.  The  production  of  both  coal  and  iron  declined 
in  consequence  of  the  lessened  demand.  Finally,  the  farmers 
were  involved  in  the  general  distress  by  the  ruinous  failure  of 
the  corn  crop  in  1894,  and  the  falling  off  of  the  European  de- 
mand for  wheat,  the  price  of  which  fell  to  less  than  fifty  cents 
a  bushel.  The  want  and  distress  were  general;  relief  work 
and  assistance  was  provided  in  most  of  the  large  cities  for  the 
unemployed.  Strikes,  riots,  and  labor  demonstrations,  such  as 
the  Chicago  strike  and  Coxey's  army,  evidenced  the  wide-sjDread 
nature  of  the  distress  and  the  industrial  unrest. 

The  uncertainty  as  to  the  ability  of  the  government  to 
redeem  the  greenbacks  and  treasury  notes  in  gold  prolonged 
the  business  unrest;  to  secure  the  necessary  gold  for  this  pur- 
pose, and  to  meet  current  deficits,  the  Treasury  sold  bonds 
amounting  to  $262,000,000  in  the  years  1894-96,  and  was 
able  to  keep  the  various  forms  of  money  on  a  parity.  The 
decisive  defeat  of  the  free-silver  advocates  in  the  elections 
of  1896  put  a  practical  end  to  the  agitation  for  cheap  money, 
and  restored  business  confidence. 


352      ECONOMIC   HISTORY    OF    THE    UNITED   STATES 

292.   The   Currency  Act   of    1900   and  gold   discoveries.  — 

Owing  to  the  free-silver  sentiment  in  the  Senate  it  was  not 
possible  to  enact  any  legislation  reforming  the  monetary 
system  until  1900.  By  the  act  of  March  14  of  that  year,  the 
gold  standard  was  definitely  adopted;  provision  was  made  for 
the  increase  of  the  gold  reserve  fund  to  $150,000,000,  and  its 
application  exclusively  to  redemption  purposes,   while  fairly 


Hydraulic  Gold  Mining  near  Telluride,  Colorado 
The  placer  deposits  are  generally  mined  by  this  process,  a  powerful 
stream  of  water  washing  the  dirt  and  gravel  into  sluices,  where  the 
heavy  gold  is  held  by  riffles,  and  then  collected  by  means  of  mercury. 
It  is  vastly  more  economical  than  the  old  hand  methods. 

effective  though  clumsy  methods  for  maintaining  the  fund 
were  authorized.  At  the  same  time  the  gold  discoveries  in 
Alaska  in  1898  brought  about  a  great  increase  in  the  pro- 
duction of  that  metal  and  its  circulation  in  the  United 
States;  in  the  five  years  between  1898  and  1902  there  was 
coined  at  the  United  States  mints  over  $437,000,000  in  gold, 
as  against  a  quinquennial  average  since  1873  of  $258,000,000. 
This  increase  in   our   money  supply,  together  with   the  ad- 


CURRENCY    AND    BANKING         '  353 

ditions  to  the  bank-note  circulation,  brought  up  the  per 
capita  circulation  from  $23.85  in  1893,  when  the  purchase 
of  silver  by  the  government  ceased,  to  $33.86  on  July  1,  1907. 
This  has  been  followed  by  a  great  rise  in  the  general  level  of 
prices,  of  over  16  per  cent,  in  the  period  1893-1907. 

To  secure  the  fullest  development  of  the  resources  of  a 
country  and  the  freest  interchange  of  commodities  and  services 
an  adequate  supply  of  the  media  of  exchange  is  essential. 
Just  how  much  constitutes  enough  is,  however,  a  matter  of 
contention.  In  the  undeveloped  and  sparsely  settled  sections 
of  our  country,  where  capital  is  scarce  and  banking  facilities 
inadequate,  there  has  always  been  a  strong  demand  for  cheap 
and  abundant  money.  Before  the  Civil  War  this  took  the 
form  of  a  demand  for  issues  by  State  banks.  When  the 
government  began  the  issue  of  greenbacks,  and  especially 
after  the  restriction  of  State  bank  notes,  the  inflationists 
naturally  looked  to  the  Federal  government  for  assistance; 
as  they  did  not  regard  the  national  banks  with  favor  they  did 
not  wish  an  increase  in  the  issue  of  national  bank-notes. 
After  the  failure  of  the  efforts  to  inflate  the  currency  by 
means  of  new  issues  of  greenbacks,  this  party  naturally  turned 
to  the  coinage  of  silver,  which  was  now  falling  in  price. 
Failing  to  secure  absolutely  free  coinage  of  that  metal,  they 
were  able  to  provide  for  the  purchase  by  the  United  States 
government,  from  1878  to  1893,  of  practically  the  entire  silver 
production  of  the  country. 

With  the  filling  up  of  the  West,  the  enormous  additions  of 
gpld  to  our  money  supply,  the  provision  of  more  adequate 
banking  facilities  in  the  sparsely  settled  districts,  and  the 
enactment  of  positive  legislation  on  the  subject  by  Congress, 
it  is  probable  that  the  demand  for  further  inflation  of  the 
currency  by  direct  action  of  the  government  has  been  finally 
hushed.  It  must  be  said  that  the  net  results  of  efforts  of  the 
government  to  provide  the  necessary  money  for  the  people 
have  been  disastrous.  In  the  future,  we  may  look  for  any 
further  additions  to  our  money  supply  to  an  increase  in  the 
24 


354     ECONOMIC   HISTORY    OF    THE    UNITED    STATES 

circulation  of  gold  and  to  larger  issues  by  our  national  banks 
under  a  revised  system.  For  the  maintenance  of  an  adequate 
supply  we  cannot  do  better  than  trust  to  the  natural  laws  of 
trade. 

SUGGESTIVE  TOPICS  AND  QUESTIONS.     CHAPTER   XXIV 

1.  What  was  the  cost  of  the  Civil  War?  [Mitchell,  Greenbacks  and 
the  Cost  of  the  Civil  War,  in  Joiirn.  Pol.  Econ.,  V,  117-156,  also  in  Rep. 
of  Mon.  Com.,  1898,  445-479;  Rand,  Econ.  Hist.,  520;  BoUes,  Fin.  Hist. 
Ill,  241-248;  Adams,  Pub.  Debts,  127-133.] 

2.  How  was  the  war  debt  paid?  [Payment  of  War  Debt,  in  Rand, 
Econ.  Hist.,  522;  Bolles,  III,  315-320;  J.  Sherman,  Recollections,  I, 
440;  Dewey,  352-358.] 

3.  Was  the  issue  of  greenbacks  necessary?  [Dewey,  284-290;  Rhodes, 
Hist,  of  U.  S.,  Ill,  559-572;  Mitchell,  History  of  the  Greenbacks;  Bolles, 
Fin.  Hist,  of  U.  S.,  Ill,  chaps.  3,  4,  8;  Knox,  U.  S.  Notes,  chap.  9;  White, 
Money  and  Banking,  148-165;  Hart,  Chase,  chap.  9.] 

4.  Why  did  the  issue  of  greenbacks  drive  out  gold  and  increase  prices? 
[Dewey,  292-297;  Gide,  237-241;  Seager,  309;  Bullock,  Intro.,  234,  249.] 

5.  Is  the  issue  of  government  paper  money  equivalent  to  an  increase 
of  wealth?  [Gide,  265-269;  Walker,  Pol.  Econ.,  159-174;  Mill,  Pol.  Econ., 
book  3,  chap.  13.] 

6.  State  the  monetary  demands  of  the  Greenback  Party;  of  the  Popu- 
li.st  Party.  Do  you  approve  of  these  demands?  [McVey,  Populist  Move- 
ment; Dewey,  378-382;  Lalor's  Cyclopaedia,  II,  418-419;  Atl.  Mo.,  LII, 
521-530.] 

7.  What  is  the  present  status  of  the  greenback?  [Dewey,  469-471; 
Taussig,  The  Currency  Act  of  1900,  in  Quart.  Journ.  Econ.,  XIV,  394- 
410;  Dunbar,  Safety  of  the  Legal  Tender  Paper,  in  Quart.  Journ.  Econ., 
XI,  223.] 

8.  Describe  the  organization  and  working  of  a  national  Ijank  with 
which  you  are  acquainted.  [Dunbar,  Theory  and  Hist,  of  Banking,  132- 
141;  White,  Money  and  Banking,  406-414.] 

9.  What  provisions  exist  to  secure  the  safety  of  the  national  bank 
notes?     [Dunl)ar,  167;  Dewey,  375,  470.] 

10.  What  is  meant  by  the  free  coinage  of  silver?  Has  it  ever  existed 
in  the  United  States?     [}Vatson,  chap.  5.J 

11.  Was  the  act  of  1873  passed  secretly  as  the  result  of  a  gold  con- 
spiracy? [Laughlin,  92-105;  White,  213-223;  Watson,  chap.  9;  Dewey, 
403-7;  Bullock,  Mon.  Hist.,  110-114;  J.  T.  Cleary,  The  Crime  of  1873,  in 
Sound  Currency,  III,  no.  13.] 


CURRENCY    AND   BANKING  355 

12.  Why  did  silver  fall  in  price  after  1871?  [Laughlin,  chaps.  8-12; 
Watson,  119.] 

13.  How  much  did  the  per  capita  circulation  of  money  increase  from 
1878  to  1907?  Is  it  a  good  thing  for  a  country  to  have  a  larger  circu- 
lation of  money?  [Hadley,  Economics,  214;  Walker,  Relation  of  Changes 
in  the  Volume  of  Currency  to  Prosperity,  in  Econ.  Studies  of  Amer. 
Econ.  Assoc,  vol.  1,  no.  1;  Walker,  Money,  Trade  and  Industry,  chap.  4.] 

14.  Does  the  government  make  any  effort  to  secure  gold  for  circula- 
tion? Why  is  it  brought  to  the  mint  to  be  coined?  Are  we  likely  to  get 
enough  if  we  leave  it  to  individuals?  [Bullock,  Introduction,  271-274; 
Seager,  Introduction,  366.] 

15.  Why  is  the  demand  for  money  greater  in  sparsely  settled  com- 
munities than  in  thickly  settled  states?  [Bullock,  Mon.  Hist.,  chap.  8; 
Taussig,  Silver  Situation,  113.] 

16.  Name  all  the  different  kinds  of  money  in  the  United  States  and 
the  amount  of  each  in  circulation.  [An.  Rep.  of  Secretary  of  Treasury  — 
latest  number.] 

17.  Could  you  suggest  any  improvements  or  reforms  in  our  monetary 
system? 

18.  What  is  the  independent  treasury  system?  [Kinley,  Independent 
Treasury  System;  Lalor,  II,  493-496;  Encyclopedias.] 

SELECTED  REFERENCES.     CHAPTER   XXIV 

**Dewey:  Financial  History  of  the  United  States,  chaps.  12,  15-17,  19,  20. 
*Laughlin:  History  of  Bimetallism  in  the  United  States,  chaps.  14-17. 
*Mitchell:  A  History  of  the  Greenbacks. 

* Monetary  Commission  Report,  1898,  p.  138  (silver),  197  (banking), 

398  (U.  S.  notes.) 
**Xoyes:  Thirty  Years  of  American  Finance,  chaps.  1-3,  8-10. 
**Taussig:  The  Silver  Situation. 

Dunbar:  Theory  and  History  of  Banking,  chap.  10. 

Hepburn:  History  of  Coinage  and  Currency  in  the  United  States,  chaps. 

8-19. 
Russell:  International  Monetary  Conferences,  chaps.  1-5,  9. 
Sherman:  Recollections  of  Forty  Years,  chaps.  22,  24-27. 
Walker:  International  BimetaUism,  chaps.  4-8. 
White:  Money  and  Banking,  book  1,  chaps.  5,  6;  book  2,  chaps.  3,  5,  6; 

book  3,  chaps.  14,  16.  • 


CHAPTER   XXV 
MANUFACTURING  FOR  HOME  USE     (1860-1880) 

293.  The  Civil  War  as  an  industrial  revolution.  —  We  have 
already  seen  that  the  two  decades  prior  to  the  Civil  War  had 
witnessed  a  rapid  growth  in  the  United  States  in  manufac- 
turing industries,  which  were  yearly  becoming  more  adequate  to 
meet  the  home  demands.  It  was  certain  that  a  nation  which 
possessed  the  w^onderful  natural  resources  of  this  country  would 
not  long  continue  to  purchase  her  manufactured  commodities 
abroad.  vSooner  or  later  she  would  manufacture  for  herself  all 
those  things  for  whose  production  she  was  pre-eminently  fitted 
by  reason  of  the  possession  of  boundless  and  cheap  raw  materials. 
This  natural  but  slow  process  was,  however,  sharply  interrupted 

7  by  the  Civil  War,  which,  by  practically  cutting  off  foreign  inter- 
course, immensely  hastened  the  growth  of  domestic  industries. 
The  industrial  revolution  thus  inaugurated  has  been  compared 
with  that  in  England  one  hundred  years  before.  It  certainly 
marks  a  turning-point  in  the  economic  development  of  the  coun- 
try as  distinct  as  that  in  its  political  life,  and  more  significant 
in  its  effects  than  the  earlier  industrial  revolution  introduced 
in  this  country  fift}-  years  before  by  the  restrictive  period. 

294.  Factors  in  the  industrial  development.  —  The  cause 
which  had  the  most  immediate  effect  on  the  rapid  growth  of 
manufacturing  industries  was  the  imposition  of  heavy  war 
tariffs  on  all  imported  goods,  by  which  the  home  market  was 
practically  reserved  for  domestic  manufacturers.  The  war 
demands  for  food,  clothing,  arms,  and  similar  commodities, 
the  rise  of  prices  occasioned  by  the  over-issue  of  legal  tender 
paper  money,  and  other  causes  gave  additional  stimulus. 
More   important,   however,   because   more   fundamental,   were 

35G- 


MANUFACTURING    FOR   HOME    USE 


357 


the  changes  going  on  in  the  other  parts  of  the  industrial  or- 
ganism, which  have  been  traced  in  the  foregoing  chapters. 
The  opening  up  of  the  West  and  the  immense  expansion  of  our 
grain  production,  together  with  the  development  of  improved 
means  of  transportation  between  the  manufacturing  and 
agricultural  sections  of  the  country,  increased  the  purchasing 
power  of  the  West  and  assured  the  eastern  manufacturers  a 
market  for  their  goods.  After  the  cessation  of  hostilities  the 
South,  too,  made  large  demands  upon  the  North  for  capital  in 
various  forms,  as  well  as  manufactured  articles  of  every  de- 
scription, while  the  exploitation  of  the  mines,  forests,  and  other 
natural  resources  of  the  country  furnished  the  manufacturers 
with  cheap  raw  materials.  The  freedom  of  interstate  commerce 
and  absence  of  restrictive  traditions  should  also  be  mentioned 
as  factors  contributing  in  no  small  degree  to  the  industrial 
development  of  the  country.  '^  The  mainland  of  the  United 
States  is  the  largest  area  in  the  civilized  world  which  is  thus  unre- 
stricted by  customs  (duties),  excises,  or  national  prejudice,  and 
its  population  possesses,  because  of  its  great  collective  wealth, 
a  larger  consuming  capacity  than  that  of  any  other  nation." 

295.  Growth  of  manufactures.  —  The  growth  of  manufac- 
tures may  best  be  sho\fn  by  statistics,  though  the  remarkable 
diversity  of  industries  and  increase  in  the  volume  of  products 
is  not  revealed  by  such  a  method.  The  following  table  shows 
the  progress  in  manufactures  from  1850  to  1880: 

Growth  of  Manufactures  and  of  Home  Consumption, 
1850-1880 


Year 

Value  of  prod- 
ucts of 
national 
manufactures 

Amount  of 

capital 

invested 

Number 

hands 
employed 

Importation 

of  foreign 
manufactures 

Consump- 
tion of  do- 
mestic 
manufac- 
tures, 
per  cent. 

Consump- 
tion of 
foreign 

manufac- 
tures, 

per  cent. 

1850  . 
1860  . 
1870  . 
1880  . 

Sl,bl9,109,616 
1,885,861,676 
4,232,325,442 
5,369,579,191 

$533,245,351 
1,009,855,715 
2,118.208,769 
2,790,272,606 

958,079 
■1,311,246 
2,053,996 
2,732,595 

$130,838,280 
261,264,310 
308,363.496 
423,699,010 

88.39 
87.57 
93.14 
92.58 

11.61 

12.43 

6.86 

7.42 

358      ECONOMIC   HISTORY    OF    THE    UNITED    STATES 

In  the  twenty-year  period  between  1860  and  1880  there  was 
thus  a  gain  of  184.7  per  cent,  in  the  value  of  the  manufactured 
product  and  of  176.3  per  cent,  in  the  capital  invested  as  against 
an  increase  of  59  per  cent,  in  the  population.  An  official  report 
in  1S69,  quoted  l)y  Dewey,  declared  that  "  within  five  years 
more  cotton  spindles  had  been  put  in  operation,  more  iron 
furnaces  erected,  more  iron  smelted,  more  bars  rolled,  more 
steel  made,  more  coal  and  copper  mined,  more  lumber  sawn 
and  hewn,  more  houses  and  shops  constructed,  more  manu- 
factories of  different  kinds  started,  and  more  petroleum  col- 
lected, refined,  and  exported,  than  during  any  equal  period  in 
the  history  of  the  country."  And  with  the  exception  of  the 
two  or  three  years  following  the  panic  of  1873,  a  similar 
expansion  characterized  the  next  decade.  The  growth  in  the 
number  of  cities  of  8000  inhabitants  and  over  from  141  in 
1S60  to  2S6  in  1880  simply  illustrates  somewhat  differently 
the  increasing  application  of  the  people  to  manufacturing  and 
industrial  pursuits. 

296.  Growing  self-sufficiency  of  the  United  States.  —  Still 
more  significant,  however,  than  the  mere  physical  bigness  of 
our  industries  was  the  increasing  adequacy  of  our  production 
to  the  home  demand.  In  the  case  of  food  products  and  raw 
materials  the  country  had  long  supplied  its  own  needs:  wheat, 
corn,  cotton,  tobacco,  and  other  .agricultural  products  had 
since  colonial  days  been  raised  in  sufficient  quantities  to  yield 
an  exportable  surplus;  while  the  resources  of  coal,  iron,  copper 
(more  recently),  lumber,  and  other  raw  materials  of  manu- 
facturing were  just  beginning  to  be  exploited  on  a  laTge 
scale.  In  the  case  of  manufactured  goods,  on  the  other 
h;m(l.  we  had  always  imported  large  quantities  from  England 
and  iMU'opc.  Largely  as  a  result  of  the  restrictive  war  tariff 
the  proportion  of  domestic  manufactures  consumed  in  the 
United  States  greatly  increased  —  from  88  per  cent,  in  1860  to 
93  per  cent,  in  1880.  The  articles  imported  consisted  prin- 
cipally of  the  finer  grades  of  textiles,  and  of  luxuries.  And 
yet  even  of  these  the  domestic  manufacturers  were  everv  vear 


MANUFACTURING    FOR   HOME    USE 


359 


more  nearly  meeting  the  domestic  demand.  Thus  —  to  select 
only  one  instance  —  the  proportion  of  silk  goods  made  in  the 
United  States  of  the  whole  quantity  consumed  grew  from  13 
per  cent,  in  1860  to  38  per  cent,  in  1880. 

297.  The  textile  industries.  —  The  progress  of  manufactur- 
ing can  best  be  traced  by  noting  the  phenomenal  development 
in  a  few  of  the  leading  industries.  In  the  magnitude  of  the 
interests  involved  the  first  place  is  taken  by  the  textile  indus- 
tries, as  will  be  seen  in  the  following  table: 


Year 

Number  of 
establish- 
ments 

Capital 

Numl)er  of 
Employees 

Value  of 
Products 

1860 
1870 
1880 

3,027 
4,790 
4,018 

$150,080,852 
297,694,243 
412,721,496 

194,082 
274,943 
384,251 

$214,740,614 
520,386,764 
532,673,488 

Of  the  different  branches  of  the  textile  industry,  the  manu- 
facture of  cotton  ranks  first  in  importance.  Almost  destroyed 
during  the  Civil  War  by  the  cutting  off  of  the  supplies  of  raw 
cotton,  whereby  two  thirds  of  the  spindles  in  the  country  were 
rendered  idle,  it  quickly  recovered  after  that  event.  In  the 
twenty-year  period,  1860-80,  the  number  of  spindles  in  opera- 
tion and  the  amount  of  raw  cotton  consumed  practically 
doubled.  This  same  period  witnessed  a  still  more  extraordi- 
nary growth  in  the  woolen  manufactures,  the  amount  of  capital 
invested  and  the  value  of  the  products  more  than  trebling  in 
that  interval;  this  was  largely  due  to  the  demand  for  woolens 
for  arnw  purposes  and  to  the  cotton  famine. 

The  most  phenomenal  development,  however,  was  seen  in 
silk  manufactures,  the  value  of  whose  products  increased  from 
six  to  forty-one  million  dollars.  While  the  silk  manufacture 
is  the  oldest  branch  of  the  textile  industries  in  the  United 
States,  it  has  always  suffered  from  a  lack  of  raw  materials. 
The  invention  of  the  sewing-machine  led  to  a  demand  for 


360      ECONOMIC    HISTORY    OF    THE    UNITED   STATES 

sewing-silk,  and  in  1852  the  production  of  ''  machine-twist  " 
was  begun,  which  practically  marked  the  beginning  of  the  silk 
m.anufactures  in  this  country.  Manufactures  of  spun  silk, 
ribbons,  dress  goods,  etc.,  w^ere  commenced  during  or  after  the 
Civil  War.  Other  important  textile  industries  were  carpets, 
hosiery,  and  knit  goods,  and  dyeing  and  finishing. 

298...  Improvements  in  the  textile  industries.  —  Great  im- 
provements were  made  in  all  departments  of  the  cotton  in- 
dustry after  the  Civil  War;  steam  ginneries  began  to  l^e 
substituted  for  the  older  ones  run  by  horse  or  mule  power; 
the  cottonseed  began  to  be  used  for  oil  and  fertilizers.  The 
main  improvements,  however,  took  place  in  the  process  of  manu-  , 
facture  itself.^  Textile  manufacturers  in  the  United  States 
have  always  enjoyed  a  certain  advantage  over  English  or 
European  competitors  in  the  size  of  the  domestic  market  for 
which  they  produce.  They  have  produced  staple  goods  in 
large  quantities  for  a  uniform  class  of  customers,  and  have  thus 
been  able  to  introduce  the  most  improved  and  expensive 
machinery.  On  the  other  hand,  owing  to  the  high  price  of 
labor  here,  the  finer  grades  and  those  subject  to  a  variable 
demand  have  been  imported  from  abroad.  The  increasing  use 
of  steam  was  emancipating  the  cotton  factories  more  and  more 
from  the  dependence  on  the  water-power  of  certain  localities, 
and  w^as  preparing  the  way  for  that  migration  of  the  cotton' 

^  The  great  advance  made  in  cotton  manufacturing  is  well  illustrated 
in  the  following  quotation  from  the  Census  of  1880  (Vol.  IV,  p.  941):  "At 
the  Atlanta  Cotton  Exposition  of  1881  were  to  be  found  five  women  from 
the  mountain  section  of  Georgia,  spinning  and  weaving  coarse  cotton 
fabrics  by  the  use  of  the  hand-card,  the  spinning-wheel,  and  the  hand- 
loom.  They  were  representatives  of  a  large  section  of  the  United  States 
and  of  a  very  considerable  population,  variously  estimated  at  from  200,000 
to  300,000  in  number,  who  have  not  been  reached  until  lately  by  the 
railroad,  or  been  able  to  avail  themselves  of  modern  arts  to  any  great 
extent.  At  the  measure  of  their  work,  two  carders,  two  spinners,  and  one 
weaver  could  produce  eight  yards  of  coarse  cotton  cloth  in  a  day  of  ten 
hours.  The  same  number  of  persons  employed  in  the  modern  cotton 
factories  can,  by  the  use  of  machinery,  with  far  less  arduous  labors,  pro- 
duce 800  yards  of  the  same  cloth,  or  one  hundred-fold  as  much." 


MANUFACTURING    FOR    HOME    USE 


3G1 


factories  to  Ihe  South,  which  was  to  become  more  apparent  in 
the  next  generation. 

299.   Iron  and  steel  industry.  —  In  no  industry  in  the  United 
States  was  tlie  rate  of  growth  after  the  war  so  great  as  in  the 


Bessemer  Converter  at  Edgar  Tho.msox  Works,  Pittsburg 
Before  iron  can  be  used  in  the  manufacture  of  steel,  various  impuri- 
ties must  be  got  rid  of,  such  as  phosphorus,  carbon,  etc.  This  is 
done  in  the  Bessemer  converter  ^A•here  the  impurities  are  blown  off 
by  forcing  a  blast  of  cold  air  through  the  molten  iron,  as  seen  in  the 
converter  near  the  center  of  the  picture.  The  color  of  the  flame  indi- 
cates to  the  operative  the  condition  of  the  metal,  and  at  the  proper 
moment  he  must  stop  the  blast.  The  converter  is  then  tipped 
over  and  metal  is  then  poured  out,  as  seen  at  the  left  side  of  the 
illustration,  into  ingot  molds,  of  which  a  row  (used  for  another  con- 
verter not  shown)  is  seen  under  the  bench  at  the  extreme  right. 
When  hard  the  steel  is  forced  out  of  the  ingot  molds,  which  are 
open  at  both  ends,  by  means  of  a  hydraulic  ram,  and  the  billets- 
are  then  ready  for  use  in  the  manufacture  of  steel  products. 

iron  and  steel  industry.  As  early  as  1866  the  English  economist 
Jevons  wrote:  "  It  is  impossible  that  there  should  be  two 
opinions  as  to  the  future  seat  of  the  iron  trade.     The  abundance 


362      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

and  purity  of  both  fuel  and  ore  in  the  United  States,  with  the 
commercial  enterprise  of  the  American  manufacturers,  put  the 
question  beyond  a  doubt."  Nor  did  this  prophecy  remain 
long  unfulfilled.  The  amount  of  pig  iron  produced  increased 
from  919,770  tons  in  1860  to  4,295,414  tons  in  1880,  while  the 
relative  increase  in  the  production  of  steel  was  still  greater  — 
from  9,044  tons  in  1863  to  1,397,015  in  1880.  The  principal 
causes  of  this  remarkable  growth,  in  addition  to  the  opening 
up  of  abundant  and  cheap  deposits  of  both  coal  and  iron,  were 
the  improvements  in  methods  of  production,  such  as  the  hot- 
air  blast,  the  regenerative  gas  furnace,  the  substitution  of  coke 
for  anthracite  coal,  the  introduction  of  the  Bessemer  process, 
and  more  scientific  methods  at  every  stage  of  production.  On 
the  other  hand,  the  expanding  demand  for  rails,  machinery, 
and  other  steel  and  iron  products  gave  a  strong  impetus  to 
their  manufacture. 

300.  Production  of  iron  and  steel.  —  While  the  period  before 
the  Civil  Wur  had  been  marked  by  the  change  from  charcoal  to 
anthracite  in  the  production  of  pig  iron,  the  twenty  j^ears  fol- 
lowing saw  bituminous  coal  (chiefly  in  the  form  of  coke)  pass 
anthracite  as  a  fuel.  This  fact  enabled  the  industry  to  spread 
into  many  new  districts;  in  1880  iron  was  made  in  thirty 
States.  Pennsylvania,  which  for  more  than  a  hundred  years 
had  been  the  leading  iron-producing  State  in  the  Union,  still 
yielded  about  fifty  per  cent,  of  the  total.  The  concentration 
of  the  industry  was  not  so  great,  however,  as  was  that  of  the 
textile  industry. 

The  year  1867  marks  the  beginning  in  the  manufacture  of 
Bessemer  steel  in  this  country,  when  3000  tons  were  produced; 
this  had  grown  to  1,203,173  tons  in  1880.  This  event  marked 
the  inauguration  of  the  era  of  steel,  which  now  began  rapidly 
to  displace  iron  in  all  uses  where  strength  and  durability  were 
needed.  The  growth  of  the  industry  as  a  whole  may  be  seen 
in  the  following  table: 


MANUFACTURING    FOR    HOME    USE 


363 


Manufacture  of  Iron  axd  S-teel,   I860-] 

L880 

Year 

Number  of  Es- 
tablishments 

Amount  of 
Capital 

Value  of                 Hands 
Product              Employed 

1860^  . . 
1870... 
1880... 

402 

808 

1005 

$23,343,073 
121,772,074 
230,971,884 

$36,537,259 
207,208,696 
296,557,685 

22,014 

77,555 

140,978 

301.  Clothing  and 
footwear.  —  A  brief  de- 
script  ion  of  two  of  the 
industries  which  were 
revolutionized  during 
this  period  may  be 
added  at  this  point. 
Before  1850  the  manu- 
facture of  men's  (and 
children's)  clothing  was 
mainly  a  household  in- 
dustry, but  with  the 
introduction  of  the 
sewing-machine  into 
general  use  it  was 
transferred  to  shops 
and  factories.  An  es- 
pecial impetus  was 
given  to  the  industry 
during  the  war  by  the 
great  demand  for  army 
clothing.  With  the 
large  influx  of  Russian 
Jews  into  this  coimtry 
in  1876  and  subsequent 
years,  the  sweating 
system,  unhappily  still 
characteristic  of  the  in- 
^  Iron  — 


The  McKay  Sewing  Machine 
The  application  of  the  sewing  machine  to  the 
manufacture  of  shoes  was  extremely  impor- 
tant, and  was  first  made  a  practical  success 
in  the  McKay  machine.  The  work  of  sewing 
the  upper  and  the  sole  together  had  always 
been  a  difficult  and  laborious  task,  but  the 
work  could  now  be  performed  with  the  expen- 
diture of  a  fraction  of  the  time  and  cost  neces- 
sary under  the  hand  labor  method.  On  this 
machine  a  single  operator  can  sew  nine  hun- 
dred pairs  of  shoes  in  a  day  of  ten  hours. 

forged,  rolled,  and  wrought. 


364      ECONOMIC    HISTORV    OF    THE    UNITED    .STATES 


dustry    tu-day,    was    introduced. 


Lasting  Machine 
The  process  of  lasting  —  that  is  of  fit- 
ting the  upper  part  of  a  shoe  to  the 
sole  over  a  last  or  model  of  the  human 
foot  —  is  the  most  important  and  diffi- 
cult operation  in  the  making  of  a  shoe. 
A  delicate  and  curious  pulling  of  the 
leather  is  required  to  give  a  smooth 
finish,  and  it  was  long  thought  that 
this  work  could  be  done  only  by  hand. 
In  this  machine  pincers  grasp  and 
manipulate  the  upper  leather  with  al- 
most human  skill,  and  shape  it  on  the 
last ;  it  is  then  fastened  to  the  insole 
l)y  tacks  which  are  fed  automatically 
through  a  raceway.  Without  such  a 
machine  it  would  be  practically  im- 
possible to  meet  the  commercial  de- 
mand for  shoes  to-day.  but  the  work 
of  lasting  on  the  most  expensive  shoes 
is  still  done  by  hand. 

but   suide  the  material  from  m 


Instead  of  a  skilled  tailor 
making  a  complete  garment, 
a  team  of  three  to  five  per- 
sons now  divided  the  work 
and  produced  the  finished 
article  under  the  task  sys- 
tem, one  man  cutting  out  the 
garment,  a  second  basting  it, 
a  third  and  a  fourth  button- 
holing and  finishing  it,  while 
a  fifth  pressed  it,  each  per- 
son being  paid  by  the  piece 
on  a  very  low  scale.  While 
the  price  has  been  greatly 
reduced  and  production 
stimulated,  it  has  been  at  a 
frightful  social  cost.  The 
value  of  the  product  grew 
from  $80,830,555  in  1860  to 
$209,548,460  in  1880.  The 
manufacture  of  women's 
ready-made  clothing  has 
never  been  so  important,  and 
prior  to  1880  was  confined 
almost  exclusively  to  cloaks; 
the  total  value  of  factory 
products  in  that  year  was 
only  $32,004,794. 

More  typical  of  the  ma- 
chine methods  of  American 
manufacture  is  the  boot  and 
shoe  industry.  '^  Here  ma- 
chinery seems  to  have 
reached  its  culmination. 
The  human  hand  does  little 
achine  to   machine,  and  the 


MANUFACTURING    FOR   HOME    USE  365 

hammering,  the  stamping,  and  the  sewing  are  all  done  by  the 
tireless  energy  of  steam."  Previous  to  the  year  1845,  when  the 
leather-rolling  machine  was  introduced,  this  industry  had  been 
strictly  a  hand  process;  this  invention  was  followed  in  the  next 
ten  3'ears  by  the  buffing  and  the  splitting  machines,  and  by 
peg-making  and  power-pegging  machines.  The  greatest  revo- 
lution in  the  industry  was,  however,  effected  by  the  invention 
of  th-e  ^IcKay  sewing-machine.  From  that  time  on  improve- 
ments in  all  the  processes  of  manufacture  were  made  rapidly, 
even  the  apparently  confirmed  hand  process  of  lasting  being 
given  over  to  machinery  in  the  early  seventies.  By  1880 
"the  subdivision  of  labor  had  about  reached  its  limit  and  the 
present  system  had  been  perfected."  As  a  result  of  these 
various  improvements  the  labor  cost  of  100  pairs  of  men's 
boots  was  reduced  from  $408.50  by  hand  labor  in  1859  to 
$35.40  by  machine  in  1895.  The  yearly  product  grew  from 
$80,750,000  in  1860  to  $196,920,481  in  1880. 

302.  Other  manufactures.  —  The  diversity  of  manufacturing 
industries  in  the  United  States  in  1880  is  shown  by  the  fact 
that  the  census  of  that  year  distributed  them  under  332  titles; 
of  these  the  twelve  following  showed  a  total  production  of 
over  $100,000,000: 

Flouring  and  grist-mill  products $505,185,712 

Slaughtering  and  meat-packing 303,562,413 

Iron  and  steel 296,557,685 

Woolen  manufactures  (all)   267,252,913 

Lumber,  sawed 233,268,729 

Foundry  and  machine-shop  products 214,378,468 

Cotton  goods 210,950,383 

Clothing,  men's 209,548,460 

Boots  and  shoes,  including  custom  work  and  repairing  196,920,481 

Sugar  and  molasses,  refined 155,484,915 

Leather,  tanned 113,348,336 

Liquors,  malt 101,058,385 

The  most  characteristic  feature  of  American  manufactures 
has  always  been  the  invention  and  application  of  labor-saving 
machinery,  and  the  industries  which  showed  especially  rapid 


366      ECONOMIC   HISTORY   OF    THE    UNITED   STATES 

growth  during  this  period  were  characterized  by  the  introduc- 
tion of  machine  methods.  Writing  in  1865,  Peto,  a  keen 
English  observer,  made  tlie  following  comment  on  this  ten- 
dency: "  Mechanical  contrivances  of  every  sort  are  produced 
to  supply  the  w^ant  of  human  hands.  Thus  we  find  America 
producing  a  machine  even  to  peel  apples;  another  to  beat  eggs; 
a  third  to  clean  knives;  a  fourth  to  wring  clothes;  —  in  fact, 
human  hands  have  scarcely  been  engaged  in  any  employment 
in  w^hich  some  cheap  and  efficient  labor-saving  machine  does 
not  now  to  some  extent  replace  them."  The  extent  to  w^hich 
machinery  was  supplementing  hand  labor  is  seen  in  the  fact 
that  while  the  value  of  the  manufactured  products  trebled  in 
the  twenty-year  period,  1860-80,  the  number  of  persons  em- 
ployed only  doubled;  at  the  same  time  the  annual  joroduct  of 
each  operative  increased  from  $1438  to  S2015. 

303.  The  system  of  interchangeable  mechanism.  —  From  the 
earliest  times  the  American  producer  has  endeavored  to  sup- 
plement the  relative  scarcity  of  labor,  as  compared  with  the 
wealth  of  resources  to  be  exploited,  by  the  introduction  of 
labor-saving  machinery.  In  no  branch  of  mechanical  improve- 
ments has  the  genius  of  the  American  inventor  shown  itself 
more  strikingly  than  in  the  development  of  the  so-called  system 
of  interchangeable  parts.  The  essential  principle  consists  in 
making  each  part  of  an  intricate  machine  precisely  like  the 
same  part  in  every  other  machine.  Under  such  a  system  it  is 
possible  to  make  even  the  most  intricate  and  delicate  part  of  a 
machine  in  large  quantities  on  the  wholesale  plan  and  thus 
greatly  to  reduce  their  cost  of  production.  The  different  parts 
are  then  ''  asseml)led  "  at  a  single  operation.  On  the  side  of 
the  consumer  the  great  advantage,  apart  from  the  lessened 
cost,  lies  in  the  fact  that  the  wide  use  of  complicated  and 
expensive  machines  is  made  possible,  for  in  case  of  injury  a 
broken  piece  can  be  replaced  with  perfect  accuracy,  by  simply 
ordering  a  duplicate  by  number.  This  system  seems  to  have 
been  a  distinctively  American  invention,  having  been  first 
introduced  by  Eli  Whitney,  in  the  manufacture  of  firearms. 


MANUFACTURING    FOR   HOME    USE  367 

Its  greatest  application  probably  took  place  in  the  sewing- 
machine,  but  up  to  1880  it  had  revolutionized  the  manufacture 
also  of  ammunition,  locomotives  and  railroad  machinery, 
watches,  clocks,  and  agricultural  machinery.  Not  until  after 
the  exhibition  of  some  American  machinery  at  the  World's 
Fair  in  London  in  1851  does  the  system  seem  to  have  been 
generally  introduced  into  Europe. 

Equally  important  is  the  standardization  of  machinery  and 
parts.  In  the  manufacture  of  screws  or  iron  beams,  for  ex- 
ample, certain  dimensions  and  sizes,  which  are  best  adapted 
for  general  use,  are  selected  as  standard  sizes,  and  these  are 
then  turned  out  in  large  quantities  by  automatic  machinery. 
Odd  sizes  and  special  designs  can  generally  be  secured  only  by 
special  order.  In  this  manner  cheapness  and  rapidity  in 
filling  an  order  are  secured,  while  a  broken  part  can  be  secured 
from  any  firm  making  or  handling  the  standard  sizes.  Such  a 
system  was  not  possible  until  measuring  instruments  of  ex- 
ceeding accuracy  had  been  invented,  but  it  is  now  spreading 
rapidly.  Its  international  application  is  rendered  difficult  by 
the  existence  of  two  standards  of  measurement  — the  metric 
system  on  the  Continent  and  of  feet  and  inches  in  England 
and  America.  For  the  successful  invasion  of  the  foreign 
markets  by  our  manufacturers  it  would  be  desirable  to  have 
the  metric  system  adopted  in  the  United  States. 

304.  Power  in  manufacturing.  —  This  period  was  also 
characterized  ]:)y  a  great  increase  in  the  use  of  artificial  power, 
and  particularly  of  steam,  in  manufacturing.  In  this  connec- 
tion, David  A.  Wells  wrote:  "  When  the  historian  of  the  future 
writes  the  history  of  the  nineteenth  century  he  will  doubtless 
assign  to  the  period  embraced  by  the  life  of  the  generation 
terminating  in  1885  a  place  of  importance  second  to  but  very 
few  and  perhaps  to  none  .  .  .;  inasmuch  as  all  economists  are 
agreed  that  within  the  period  named  man  in  general  has  at- 
tained to  such  a  greater  (sic)  control  over  the  forces  of  nature, 
.  .  .  that  he  has  been  able  to  do  far  more  work  in  a  given  time, 
produce  far  more  product"  than  was  possible  at  the  beginning 


368      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

of  the  period.  The  increase  in  labor  force  due  to  the  increased 
use  of  steam  was  estimated  at  three  hundred -fold,  and  this,  not- 
withstanding the  relative  wastefulness  of  the  existing  steam- 
engine.  In  t  he  United  States,  the  power  used  in  manufacture  in 
1880  was  equal  to  3,410,837  horse  power,  of  which  about  two 
thirds  was  steam-power.  This  was  an  increase  of  about  ten  per 
cent.  ])er  hand  em})loyed  over  1870,  showing  a  transfer  to  that 
extent  of  nianufacturos  from  manual  to  mechanical  power. 
305.   Growth  of  patents.  —  One  of  the  unexpected  results 


TxiTED  States  Patent  Office,  Washington 
In  this  l)uildin^  may  be  seen  thousands  of  models  and  drawings, 
representing!;  patented  inventions.     In  1906  almost  32,000  patents 
were  <rrantecl. 


of  the  war  was  the  impulse  given  to  the  invention  and  use  of 
machines  designed  to  economize  human  labor;  from  4363 
j)atents  in  1S60  —  the  high-water  mark  up  to  that  time  —  the 
numl)er  rapidly  grew  to  8874  in  1866.  In  1869  the  number 
of  patents  issued  reached  12,957,  which  was  not  again  ex- 
ceeded  until   ISSl.     The  average  number  of  patents  granted 


MANUFACTURING    FOR   HOME    USE  369 

during  the  two  decades  of  this  period  was  ah:nost  four  times  as 
many  as  those  issued  during  the  decade  1850-60,  developing 
more  rapidly  than  either  the  product,  the  capital,  or  the  num- 
ber of  wage-earners  in  manufactures.  Many  extensive  indus- 
tries were  built  up  on  the  basis  of  patents,  or  old  ones  were 
completely  revolutionized;  such  were  the  iron  and  steel,  textile, 
and  railway  industries,  the  manufacture  of  sewing-machines, 
rubber  goods,  wood  pulp,  photography,  and  stereotyping  and 
electrotyping.  While  in  some  of  these  industries  American 
inventors  simply  improved  upon  processes  already  in  use  in 
other  countries,  most  of  them  were  original  and  new.  The 
American  inventor  has  not  merely  improved  the  methods  of 
making  old  things;  he  has  in  many  instances  produced  abso- 
lutely new  commodities  and  has  devised  original  ways  of 
manufacturing  them. 

308.  The  war  tariff.  —  Under  the  stress  of  the  Civil  War 
and  the  necessity  of  securing  larger  revenue,  the  financial 
methods  of  the  United  States  were  revolutionized.  In  addi- 
tion to  the  issue  of  legal-tender  paper  money  and  an  immense 
increase  in  our  public  debt,  internal  revenue  taxes  and  high 
import  duties  were  made  use  of  with  a  vigor  rarely,  if  ever, 
equaled.  From  1861,  when  the  first  additional  customs  duties 
were  imposed,  until  1865,  "no  session,  indeed  hardly  a  month 
of  any  session,  passed  in  which  some  increase  of  duties  on 
imports  was  not  made."  Heavy  duties  were  necessary  in  order 
to  offset  the  complicated  and  burdensome  system  of  internal 
revenue  duties,  which  taxed  domestic  industries  from  8  to  20 
per  cent.  The  need  of  revenue  was  the  leading  consideration 
in  the  passage  of  the  later  acts;  but  in  all  of  them  the  desire 
for  higher  protection  was  present.  The  most  important  tariff 
acts  of  the  war  period  were  those  of  1862  and  1864,  which 
granted  a  degree  of  protection  hitherto  unequaled  in  the  his- 
tory of  the  country;  under  the  act  of  1864  the  average  rate 
on  imports  was  raised  to  47  per  cent.,  while  the  average  rate 
under  the  tariff  of  1857  had  been  only  19  per  cent.  Oppo- 
sition to  high  import  duties  almost  disappeared  during  the  war, 
25 


370      ECONOMIC   HISTORY    OF    THE    UNITED   STATES 

and  these  rates  were  readily  acquiesced  in.  Indeed,  Congress 
spent  only  five  days  in  all  debating  the  measure,  but  passed 
it  practically  as  presented  by  the  Committee  on  Ways  and 
Cleans. 

307.  Attempts  to  reduce  the  tariff .  — After  the  war  the 
decreased  demand  for  revenue  led  to  a  gradual  reduction  of 
internal  revenue  taxes;  by  1872  most  of  these  had  been  abol- 
ished, leaving  only  those  on  spirits  and  tobacco  as  important 
features  of  the  excise  system.  At  the  same  time  the  national 
debt  was  being  paid  off  with  a  rapidity  unexampled  in  history. 
The  tariff,  however,  remained  practically  unchanged;  unlike 
the  internal  taxes  levied  in  1812,  which  were  repealed  imme- 
diately after  the  war,  the  tariff  of  1864  was  retained  as  a  per- 
manent element  in  our  fiscal  system.  Duties  were  reduced  in 
1870  on  a  few  purely  revenue  articles,  such  as  tea,  coffee,  wine, 
sugar,  molasses,  and  spices,  but  the  system  of  protection  was 
barely  disturbed.  By  1872  a  surplus  revenue  of  $100,000,000 
a  year  was  pouring  into  the  treasury,  and  further  reductions 
became  imperative.  A  ''  horizontal  "  ten  per  cent,  reduction 
was  accordingly  made  in  that  year  in  the  tariff,  but  after  the 
panic  of  1873,  and  the  resulting  deficit  in  Federal  revenues,  it  - 
was  easily  repealed  in  1875,  and  the  previous  rates  restored. 
No  further  changes  were  made  in  the  tariff  until  1883.  Fo?j 
twenty  years,  therefore,  the  war  tariff  remained  practically 
unchanged.  Manufacturers,  who  had  prospered  under  the 
high  }:)rotection  thus  granted,  proved  strong  enough  to  resist 
any  efforts  at  tariff  reform,  and  the  system  of  protection  which 
thus  grew  uj).  largely  by  reason  of  the  necessities  of  the  Civil 
War,  became  a  permanent  part  of  our  commercial  policy. 

SUGGESTIVE  TOPICS  AND  QUESTIONS.     CHAPTER   XXV 

1.  China  is  an  example  of  a  nation  that  has  made  itself  almost  self 
sufficing.     Has  this  been  advantageous  or  the  reverse  to  China? 

2.  Compare  the  growth  of  textile  manufactures  in  the  United  States 
and  England,  and  give  reasons.  [Ure,  The  Cotton  Manufacture  of  Great 
l^ritain,  H,  810;  T.  M.  Young,  The  American  Cotton  Industry;  Ashley, 
British  Industries,  68-92.] 


MANUFACTURING    FOR    HOME    USE  371 

3.  Why  did  France  lead  in  1900  in  the  production  and  manufacture 
of  silk?     [Trotter,  265;  Adams,  Com.  Geog.,  101,  238.] 

4.  Describe  fully  the  Bessemer  process  of  making  steel.  Was  Besse- 
mer the  original  inventor?     [Bishop,  II,  487;  Swank,  chaps.  45,  46.] 

5.  Is  iron  ore  transported  to  the  fuel  or  the  reverse.  Why?  [Roche- 
leau,  121.] 

6.  Name  the  three  largest  centers  of  the  iron  and  steel  manufacture 
in  the  United  States,  and  tell  why  each  is  important.  [Trotter,  146; 
Adams,  Com.  Geog.,  123-125.] 

7.  What  advantages  has  steel  over  iron  for  building  purposes? 
[Swank,  525-540;  Adams,  Com.  Geog.,  126.] 

8.  Describe  the  sweating  system.  Is  this  necessary  in  the  clothing 
trade?  [Wright,  Practical  Sociology,  246-249;  Bliss,  Encycl.  of  Soc.  Ref., 
arts.  Sweating  System  and  Tailoring  Trade.] 

9.  Trace  the  development  of  one  of  the  important  industries  men- 
tioned in  sect.  302.     [Depew,  One  Hundred  Years  of  American  Commerce.] 

10.  What  effect  has  the  change  from  water  power  to  steam  had 
upon  the  localization  of  industries?     [Trotter,  127-130.] 

11.  Describe  some  industry  which  owes  its  success  to  patents.  [Bryn, 
Progress  of  Invention.] 

12.  Why  was  not  the  tariff  reduced  to  the  level  existing  before  the 
war?  Were  there  any  serious  attempts  to  do  so?  [Taussig,  Tariff  Hist., 
171-193;  Dewey,  396-398.] 

13.  Is  it  a  desirable  thing  for  the  United  States  to  attempt  to  produce 
everything  that  is  needed  at  home?  [Bullock,  Intro.,  347,  362;  Seager, 
370,  375;  Walker,  Pol.  Econ.,  509-511;  Gide,  323.] 

14.  Is  there  a  conflict  of  interests  between  the  wool-growers,  the 
manufacturers,  and  the  importers  of  woolen  goods?  Are  their  interests 
all  met  by  the  tariff?  [Tau.ssig,  Tar.  Hist.,  239,  258,  291,  329;  Stanwood, 
II,  380.] 

15.  Is  it  a  w^aste  of  energy  to  send  raw  cotton  to  England  for  manu- 
facture and  then  to  import  the  manufactured  goods?  [Cairnes,  Leading 
Principles;  Bastable,  Theory  of  International  Trade.] 

16.  Is  there  an  economic  loss  involved  if  New  England  purchases  its 
fruit  from  California,  and  sends  thither  manufactured  goods? 

SELECTED  REFERENCES.     CHAPTER  XXV 

*Ashley:  Modern  Tariff  History,  190-211. 
*Carnegie:  Triumphant  Democracy,  chap.  10. 

** Tenth  Census,  vol.  2,  on  Manufactures. 

**Swank:  History  of  Iron  in  All  Ages,  chaps.  43,  45,  46. 
**Taussig:  Industry  and  Finance,  in  Shaler's  The  United  States,  II,  527- 
534. 


372      ECONOMIC   HISTORY    OF    THE    UNITED   STATES 

♦Taussig:  Tariff  History  of  the  United  States,  155-229;  and  Iron  In- 
dustry in  the  United  States,  in  Quarterly  Journal  of  Economics,  XIV, 
143-170. 

Coman:  Industrial  History  of  the  United  States,  298-305,  272-277. 

Rabbeno:  American  Commercial  Policy,  200-258. 

Stanwood:  American  Tariff  Controversies  in  the"  Nineteenth  Century,  II, 

chaps.  13,  14. 
Wright:  Industrial  Evolution  of  the  United  States,  chaps.  13,  14. 
Young,  E.:  Customs  Tariff  Legislation,  121-142. 
Young,  T.  M.:  The  American  Cotton  Industry. 


CHAPTER   :^XVI       *^ 

MANUFACTURING  ON  A  LARGE  SCALE     (1880-1906) 

308.  The  growth  of  manufactures.  —  The  most  striking 
feature  in  the  recent  industrial  development  of  the  United 
States  has  been  the  enormous  growth  of  manufactures,  both 
absolutely  and  relatively  to  other  branches  of  industry.  Be- 
tween 1850  and  1900  the  population  of  the  country  has  more 
than  trebled  (from  23,191,876  to  76,149,386),  and  the  pro-* 
ducts  of  agriculture  have  trebled  (from  $1,600,000,000  to 
$4,739,000,000).  But  in  the  same  period  manufactures  show 
an  increase  of  almost  nineteen-fold  in  the  amount  of  capital 
invested  (from  $533,000,000  to  $9,835,000,000),  and  of 
twelvefold  in  the  value  of  products  (from  $1,019,000,000  to 
$13,014,000,000).  Most  of  this  phenomenal  expansion  has 
occurred  in  the  last  two  decades,  which  have  witnessed 
the  discovery  and  utilization  of  the  natural  resources  of  the 
country  "on  an  unprecedented  scale,  the  extension  of  the 
domestic  market  by  the  settlement  of  the  West,  the  improve--^ 
ment  and  cheapening  of  transportation  facilities,  and  the 
completer  application  of  labor-saving  devices.  The  end  of 
the  nineteenth  century  saw  the  rise,  too,  of  new  lines  of 
economic  development,  which  mark  the  beginning  of  a  new 
industrial  era  in  the  United  States:  one  of  these  is  the  success- 
ful invasion  of  foreign  markets  by  American  manufacturers  in 
competition  with  other  exporting  nations;  another  is  the 
growth  of  trusts  or  industrial  combinations,  which  have  reor- 
ganized production  and  led  to  new  methods  in  both  industry  and 
finance.  Hardly  less  momentous  is  the  growth  of  great  labor 
organizations,  capable  of  coping  with  the  giant  aggregations  of 
capital,  and  the  spread  in  them  of  the  "  new  unionism." 

373 


374      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

The  following  table  presents  a  brief  summary  of  the  de- 
velopment of  manufactures  since  1880: 


Summary  of 

Manufactures,   1880-1900 

1900 

1890 

1880 

Percentage  of 
increase 

1890  to 
1900 

1880  to 
1890 

Number      of    e.s- 
tablishments  . . 

512,339 

355,415 

253,852 

44.2 

40.0 

Capital             . . . . 

$9,835,086,909 

$6,525,156,486 

$2,790,272,606 

50.7 

133.9 

Number  salaried 
officials 

397,174 

461,009 

(O 

13.8  2 

Salaries 

$404,230,274 

$391,988,208 

(1) 

3  1 

Average   number 
wage-earners  . . 

5,316,802 

4,251,613 

2,732,595 

25.1 

55.6 

Total  wages 

$2,328,691,254 

$1,891,228,321 

$947,953,795 

23.1 

99.5 

Miscellaneous  ex- 
penses  

$1,028,035,611 

$631,225,035 

(1) 

62.9 

Cost  of  materials 

$7,348,144,755 

$5,162,044,076 

$3,396,823,549 

42.3 

52.0 

Value  of 
proflucts,       in- 
clufling  custom 
work     and     re- 
pairing  

$13,014,287,498 

$9,372,437,283 

$5,369,579,191 

38.9 

74.5 

309.   The  United  States  as  a  manufacturing  nation.  —  For 

the  first  one  huiulred  years  of  its  national  existence  the  United 
States  was  primarily  an  agricultural  nation.  Its  exports  were 
derived  almost  entirely  from  agriculture  and  the  extractive 
industries,  and  the  greater  part  of  the  population  was  engaged 
in  agricultural  pursuits.     But  ever  since  the  Civil  War  the 

'  Not  reported  separately. 
2  Decrease, 


MANUFACTURING    ON    A    LARGE   SCALE 


375 


manufacturing  industries  of  the  country  had  been  expanding 
rapidly,  and  in  1890  the  census  showed  for  the  first  time  a 
greater  value  in  the  products  of  manufactures  than  of  agricul- 
ture; by  1900  the  value  of  manufactures  was  double  that  of  the 
farm  products.  This  rapid  industrial  progress  enabled  the 
United  States  to  outstrip  all  her  rivals  in  the  volume  of  her 
manufactures;  from  fourth  place  in  1860  she  attained  first 
rank  in  1894,  and  for  several  years  has  been  the  leading 
manufacturing  nation  in  the  world.  The  following  table 
from  Mulhall's  "  Industries  and  Wealth  of  Nations  "  shows 
the  relative  rank  of  the  United  States  in  comparison  with  the 
foremost  industrial  nations  of  Europe: 

Manufactures  in  the  United  States  and  Foreign  Countries 


Millions  of  Dollars 

1820 

1840 

1860 

1894 

United  Kingdom 

1411 

1883 

2808 

4263 

France 

1168 

1606 

2092 

2900 

Germany 

900 

1484 

1995 

3357 

Austria 

511 

852 

1129 

ir96 

Other  States     .... 

1654 

2516 

3455 

5'^  36 

Europe 

5644 

8341 

11,479 

17,352 

United  States 

268 

467 

1907 

9498 

Total 

5912 

8808 

13,386 

26,850 

The  industrial  supremacy  of  the  United  States  is  still  more 
evident  if  we  compare  particular  industries.  In  1890  she 
overtook  Great  Britain  in  the  production  of  both  pig  iron  and 
steel,  in  which  England  had  hitherto  been  easily  first;  in  1901 
this  country  produced  twice  as  much  pig  iron  and  nearly  three 
times  as  much  steel  as  her  insular  rival,  turning  out  more  than 


376      ECONOMIC   HISTORY    OF    THE    UNITED   STATES 

one  third  of  the  world's  supply  of  each.  Not  merely  in  the 
production  of  raw  cotton,  of  which  the  United  States  raises 
nearly  nine  tenths  of  the  world  supply,  but  in  the  manufacture 
of  cotton  goods,  hitherto  England's  chief  industry,  this  country 
has  made  great  gains;  in  1899  the  domestic  manufacturers  used 
alxnit  :360,()00,000  pounds  of  raW'  cotton  m.ore  than  the  English 
mills,  although  the  value  of  their  product  was  greater,  owing 
to  the  fact  that  they  turned  out  finer  grades  of  goods.  The 
basic  industry  for  all  others,  and  the  one  which  will  probably 
determine  the  industrial  supremacy  of  the  nations,  is  the  pro- 
duction of  coal.  In  this  the  United  States  w^as  surpassed  by 
Great  Britain  until  1899,  but  since  that  time  w-e  have  led  the 
world,  producing  about  one  third  of  the  total  supply. 

310.  Advantages  of  the  United  States.  —  The  rapid  rise  of 
the  United  States  to  the  foremost  rank  among  manufacturing 
nations  is  due  to  a  number  of  different  causes,  some  of  which 
may  be  briefly  stated  at  this  point.  The  vastness  of  the  terri- 
n  tory  and  the  fortunate  possession  by  the  United  States  of 
unparalleled  agricultural  and  mineral  resources  have  already 
been  sufficiently  described;  their  abundance  and  cheapness 
made  it  certain  that  wdien  the  people  of  this  country  devoted 
themselves  to  their  exploitation  and  manufacture  they  must 
speedily  surpass  other  less  favored,  though  industrially  more 
advanced,  nations.  Not  less  important  is  the  character  of  the 
)  people  —  their  ingenuity,  inventiveness,  and  energy;  —  qual- 
/  ities  which  have  been  developed  and  trained  by  an  admirable 
system  of  compulsory  free  education.  The  development  of 
American  manufactures  was  also  greatly  facilitated  by  the 
magnificent  system  of  inland  water-ways  and  accessible  coast 
line,  which  have  been  supplemented  and  extended  by  the 
rapid  construction  of  railways,  thus  permitting  a  cheap  and 
easy  exchange  of  products.  Closely  connected  with  this  is 
another  factor  which  has  favored  the  growth  of  manufactures: 
the  abseni2£_QLsdl  artificml.rfistxkt-i^  upon  trade  within  the 
United  States  has  permitted  an  untrammeled  development  of 
our  national  industries  and  has  assured  the  domestic  manu- 


MANUFACTURING   ON   A    LARGE   SCALE  377 

facturer  a  market  larger  in  consuming  capacity  than  that  in 
any  other  country  in  the  world.  Finally,  the  influence  of  tariff  f-^ 
legislation  in  fostering  domestic  industries  by  shutting  out 
foreign  competition  must  be  taken  into  account.  Whatever 
views  are  held  on  this  question  it  must  be  admitted  that  the 
restrictive  legislation  dating  from  the  Civil  War  has  hastened 
the  development  of  the  protected  branches  of  manufacture. 

311.  Concentration  in  large  establishments.  —  Not  merely 
have  the  manufacturing  industries  of  the  United  States  shown 
a  rapid  growth,  but  at  the  same  time  there  has  taken  place  a 
startling  concentration  of  manufactures,  especially  along  cer- 
tain lines,  into  a  relatively  smaller  number  of  establishments. 
This  tendency  has  been  in  evidence  more  or  less  since  1850, 
but  has  been  greatly  accelerated  during  the  last  two  decades. 
It  is  most  marked  in  the  case  of  the  iron  and  steel  industries,  L^ 
cotton  manufactures,  and  leather  goods,  but  is  noticeable  also 
in  the  manufacture  of  agricultural  implements,  boots  and 
shoes,  carpets,  glass,  malt  liquors,  paper,  ship-building,  slaugh- 
tering and  meat  packing,  tobacco,  and  the  textiles.  A  few 
industries,  which  are  essentially  local  in  their  nature,  show  no 
such  tendency,  such  as  flour  and  grist  mills,  cheese  and  butter 
factories,  etc.,  but  with  few  exceptions  it  is  the  prevailing  ' 
characteristic  of  manufactures  in  the  United  States.  The 
1905  census  of  manufactures  shows  the  movement  towards 
concentration  to  be  still  going  on  almost  unchecked.  The 
number  of  industrial  units  has  increased  only  4.2  per  cent, 
since  1900,  but  capital,  w^ages,  and  value  of  product  show^  in- 
creases of  from  30  to  40  per  cent.  In  the  monopolized 
industries  there  is  a  positive  decrease  in  the  number  of  estab- 
lishments. The  size  of  the  establishment  is  perhaps  best 
show^n  by  the  number  of  employees;  in  1900  there  were  1506 
plants  with  over  500  emplo3^ees  each,  of  which  443  employed 
over  1000  each;  of  these  120  were  in  the  textiles  and  103  in 
the  iron  and  steel  industr3^  The  extent  to  which  this  large- 
scale  production  has  proceeded  may  be  presented  in  statistical 
form  for  two  or  three  typical  industries,  as  follows: 


378      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 
All  Manufactures  in  the  United  States 


Aver,  product  of  each  establishment  . . 
Aver,  capital  of  each  establishment.  .  . 
Aver,  number  of  employees  of  each  es- 
tablishment   


1850 


$8,280 
$4,330 


7.7 


1860 


$13,420 
$7,190 


1870 


$13,420 
$6,720 

8.1 


1880 


$21,100 
$10,960 


10.6 


1890 


$28,070 
$19,020 


13.8 


1900 


$25,418 
$19,269 


10.4 


Cotton  Goods 


Number  of  establishments 

Average  product  of  each 
establisliment    

Average  capital  of  each  es- 
tablishment     

Average  number  of  em- 
ployees of  each  establish- 
ment     


1850 


1094 
$55,500 
$68,000 

84 


1860 


1091 

$106,000 

$90,000 

112 


1870 


956 
$185,600 
$147,000 

142 


1880 


1005 
$209,900 
$218,000 

185 


1890 


905 
$296,000 
$391,000 

242 


1900 


1055 
$321,500 
$443,000 

287 


Iron  and  Steel 


Number  of  establishments 

Average  product  of  each 
establishment 

Average  capital  of  each  es- 
tablishment    

Average  number  of  em- 
ployees of  each  establish- 
ment   


1850 

1860 

1870 

1880 

1890 

468 

542 

726 

699 

699 

$43,600 

$97,000 

$275,000 

$419,000 

$683,000 

$46,700 

$82,000 

$161,000 

$295,000 

$591,000 

53 

65 

103 

197 

250 

1900 


668 
$1,203,500 
$858,000 


333 


312.  Advantages  of  large  scale  production.  —  This  concen- 
tration of  manufactures  into  large  establishments  has  been 
caused  ])y  certain  distinct  advantages  enjoyed  by  large-scale 
production.  Foremost  among  these  are  economies  of  various 
kinds.  The  operation  of  a  business  on  a  large  scale  permits 
the  use  of  expensive  and  complicated  machinery,  its  constant 
employment,  the  minute  division  of  labor,  the  employment  of 


MANUFACTURING    ON    A    LARGE   SCALE  379 

more  skilled  management  and  superintendence,  the  utilization 
of  by-products,  and  the  economical  purchase  of  raw-material 
and  marketing  of  the  finished  product.  The  modern  factory 
requires  a  large  investment  in  expensive  machinery;  from  the 
statistics  just  presented  it  is  seen  that  while  the  average  num- 
ber of  employees  per  establishment  increased  about  thirty  per 
cent,  between  1850  and  1900,  the  average  investment  of  capital 
increased  over  three  hundred  per  cent.  This  indicates  that 
the  tendency  in  manufacturing  is  toward  machine  production. 
In  a  large  establishment  every  machine  is  utilized  to  the  ut- 
most, there  is  no  needless  duplication  of  machinery  such  as 
would  occur  for  several  small  plants,  while  expensive  machines 
to  carry  on  relatively  small  processes  can  be  profitably  installed. 
So,  too,  in  the  labor  employed  a  high  degree  of  specialization 
is  possible,  and  the  peculiar  aptitude  of  each  man  is  given 
scope  to  develop  itself.  In  experimenting  with  and  inventing 
new  machinery  and  methods  the  large  establishment  also  has 
an  advantage. 

One  of  the  most  striking  economies  is  effected  in  the  utili- 
zation of  waste  products,  which  is  profitable  onh^  when  the 
industry  is  managed  on  a  large  scale.  This  has  been  carried 
furthest  in  the  oil-refining  and  meat -slaughtering  industries, 
but  is  also  practised  extensively  in  the  iron  and  steel,  lumber, 
paper,  textile,  cottonseed  oil,  leather,  brewing,  and  other 
industries.  In  the  large  meat-packing  houses,  for  instance, 
much  that  formerly  went  to  waste,  as  hoofs,  horns,  bones,  hair, 
bristles,  fat,  intestines,  and  blood,  is  now  converted  into  soap, 
glue,  fertilizers,  albumen,  knife  handles,  combs,  buttons,  oils, 
oleomargarine,  glycerine,  etc.;  but  many  of  these  by-products 
remain  unutilized  even  at  the  present  day  in  houses  of  small 
capacity. 

313.  The  localization  of  industries.  —  The  manufactures  of 
the  United  States  are  confined  chiefly  to  that  part  of  the  coun- 
try north  of  the  Potomac  and  Ohio  and  east  of  the  Mississippi 
rivers,  and  are  especially  dense  in  southern  New  England, 
southern  New  York,  New  Jersey,  and  eastern  Pennsylvania. 


380      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

This  predominance  in  the  northeastern  section  of  the  country 
may  be  accounted  for  on  historic  and  economic  grounds  which 
have  already  been  described;  but  there  have  asserted  them- 
selves at  the  same  time  other  industrial  tendencies  which  are 
less  obvious  but  no  less  interesting.  These  are  the  localization  of 
industries  in  particular  States  and  cities,  the  specialization  of 
certain  localities,  and  the  shifting  of  industrial  centers.  The 
following  industries  are  highly  localized,  more  than  one  half 
of  the  total  value  of  the  products  in  the  United  States  being 
manufactured  in  the  specified  States:  collars  and  cuffs  and 
leather  gloves  and  mittens  in  New  York;  plated  and  britannia 
ware,  clocks,  and  brass  ware  in  Connecticut;  oyster  canning 
and  preserving  in  Maryland;  coke  and  iron  and  steel  in  Penn- 
sylvania; safes  and  vaults  in  Ohio;  whips  in  Massachusetts; 
and  vinous  liquors  in  California.  Within  these  States  the 
localization  in  cities  was  carried  still  further:  thus  85  per  cent, 
of  the  collars  and  cuffs  were  manufactured  in  Troy,  N.  Y.;  64 
per  cent,  of  the  oyster  canning  was  carried  on  in  Baltimore; 
54  per  cent,  of  the  gloves  were  made  in  the  adjoining  cities  of 
Gloversville  and  Johnstown,  N.  Y. ;  48  per  cent,  of  the  coke  in 
Connellsville,  Pa.;  48  per  cent,  of  the  brassware  in  Waterbury, 
Conn.;  and  46  per  cent,  of  the  carpets  in  Philadelphia.  Not 
only  have  these  and  other  industries  become  localized  in  a  few 
places,  but  certain  cities  have  specialized  in  particular  indus- 
tries, devoting  themselves  almost  exclusively  to  the  production 
of  one  thing.  More  than  75  per  cent,  of  the  entire  number  of 
wage-earners  in  the  following  cities  are  engaged  in  the  specified 
industry:  South  Omaha,  Neb.,  slaughtering  and  meat-packing; 
McKeesport,  Pa.,  iron  and  steel;  East  Liverpool,  Ohio,  pottery; 
Fall  River,  Mass.,  cotton  goods;  Brockton,  Mass.,  boots  and 
shoes;  Gloversville,  N.  Y.,  gloves. 

314.  Causes  of  localization.  —  The  tendency  toward  local- 
ization has  been  apparent  ever  since  the  beginning  of  colonial 
manufactures,  and  not  merely  in  this  country  but  in  other 
places  as  well.  While  sometimes  it  seems  as  though  the  choice 
of  a  location  for  a  young  industry  were  purely  fortuitous,  it 


MANUFACTURING    ON    A    LARGE   SCALE  381 

will  generally  be  found  to  have  been  determined  by  economic 
causes.  The  following  seven  advantages,  as  given  in  the 
twelfth  census  of  the  United  States,  may  fairly  be  assigned  as 
the  general  causes:  (1)  nearness  to  materials,  as  in  the  case  of 
the  paper,  tanning,  slaughtering,  pottery,  oyster  canning,  and 
tobacco  industries,  each  of  which  is  situated  in  the  vicinity  of 
the  chief  source  of  supply  of  the  raw  materials.  (2)  Nearness 
to  markets;  this  is  best  illustrated  by  the  growth  of  manufac- 
tures in  the  neighborhood  of  centers  of  population,  especially 
of  commodities  which  will  not  bear  distant  transportation. 
(3)  Water-power;  while  of  great  influence  in  the  early  days 
of  manufacture,  this  factor  has  been  steadily  diminishing  in 
importance,  though  the  growing  use  of  electricity  as  a  motive 
force  may  again  bring  it  into  prominence.  The  presence  of 
coal,  on  the  other  hand,  is  a  decisive  factor  in  many  indus- 
tries. (4)  A  favorable  climate;  thus  Fall  River  and  New 
Bedford  offer  exceptional  advantages  to  the  manufacture  of 
cotton  by  reason  of  their  even,  moist  climate.  (5)  A  supply 
of  labor;  owing  to  this  fact  it  is  difficult  to  establish  manufac- 
turing industries  in  the  West  and  to  a  less  degree  in  the  South, 
because  of  the  inadequate  or  inefficient  labor  supply.  (6) 
Capital  available  for  investment  in  manufactures;  while  out- 
side capital  can  usually  be  obtained,  a  supply  of  local  capital 
is  often  essential;  the  growth  of  the  cotton  industry  in  New 
Bedford  about  1850  has  been  ascribed  to  the  supply  of  local 
capital  set  free  there  by  the  decline  of  the  whaling  industry. 
(7)  The  momentum  of  an  early  start ;  the  leadership  of  Lynn, 
Mass.,  in  the  boot  and  shoe  industry,  which  dates  from  1750, 
is  probably  due  chiefly  to  this  cause.  Once  begun,  the  local- 
ization of  industries  tends  to  become  constantly  greater  and 
is  overcome  only  by  potent  economic  forces. 

315.  The  migration  of  industries.  —  As  the  country  has 
grown,  new"  industries  have  been  established  in  the  newer 
sections;  the  center  of  manufactures,  as  well  as  the  center  of 
population,  has  moved  steadily  westward.  The  filling  of  the 
middle  West  and  the  growth  there  of  large  cities  have  provided 


382      ECONOMIC   HISTORY    OF    THE    UNITED    STATES 


the  necessary  labor  supply,  markets,  and  capital,  while  new 
sources  of  supply  of  raw  materials  have  hastened  the  establish- 
ment of  industries  rivaling  those  of  the  older  sections  of  the 
country. 

The  very  forces  which  make  for  localization  tend  also  to 
shift  the  industry  when  these  forces  show  themselves  more 
strongly  in  other  localities.  Thus  the  manufacture  of  agri- 
cultural implements  has  advanced  from  New  York  to  Ohio 
and  to  Illinois,  following  the  retreating  hard-wood  forests  and 
agricultural    interests.     In    the    cotton    industry    a    striking 


MAP  SHOWIUG  THE 

CENTER  OF  MANUFACTURE' 

AT  EACH  DECADE 

1850  to   1900 

AND  THE 

CENTER  OF   POPULATION 
FROM  1790  TO  1900 
*   Center  of  Population     jjan^fi^ij 
0  Center  of  Manufactures 

SCALE    OF    MILES       ^x^  fii 


Fri^ui  THE  TWELFTH  CENSL'S,  1900. 

change  has  taken  place  in  the  rapid  advance  of  the  southern 
States,  especially  North  and  South  Carolina  and  Georgia;  the 
value  of  the  cotton  products  of  these  three  States  constituted 
6.2  per  cent,  of  the  total  in  1880,  and  22.6  per  cent,  in  1900. 
During  the  same  period  the  capital  invested  in  southern  cotton 
mills  increased  from  $21,900,000  to  $125,000,000,  the  number 
of  spindles  from  610,000  to  4,300,000,  and  the  consumption  of 
cotton  from  205,000  to  1,500,000  bales.  This  growth  has  been 
largely  at  the  expense  of  the  New  England  mills,  and  still  more 


MANUFACTURING    ON    A    LARGE    SCALE  383 

of  those  in  Europe,  and  is  due  to  the  proximity  of  the  raw 
material,  the  excellent  water-power,  and  the  supply  of  cheap 
labor.  The  migration  of  the  leather  industry  from  Massachu- 
setts and  New  York  to  Pennsylvania  and  the  Central  and 
Western  States,  which  began  about  1880,  was  due  to  the  ex- 
haustion of  the  tan-bark  supply.  Slaughtering  and  meat- 
packing, which  had  its  beginning  in  Cincinnati  about  1818, 
has  moved  gradually  westward,  following  the  opening  up  of 
new  grazing  sections  for  cattle  and  swine. 

316.  The  industrial  development  of  the  South.  —  A  most 
significant  feature  of  the  material  development  of  the  United 
States  during  the  past  twenty  years  has  been  the  marvelous 
industrial  revolution  in  the  South.  As  a  result  of  this  we  shall 
probably  soon  see  a  considerable  shifting  of  the  center  of  manu- 
factures to  the  Southwest.  Although  cotton  growing  w^as  for 
a  generation  after  1860  practically  the  only  interest  of  the 
South,  and  remains  still  the  chief  one,  manufactures  began 
about  1880  to  reach  that  section.  The  value  of  the  manu- 
factured products  increased  from  $338,791,898  in  1880  to 
$1,184,398,684  in  1900,  and  the  capital  invested  in  manufac- 
tures from  $192,949,654  to  $953,850,192  during  the  same 
period.  The  greatest  development  naturally  took  place  in 
cotton  manufactures,  nearly  half  of  the  cotton  factories  of  the 
United  States  being  situated  there  in  1900,  and  consuming 
40  per  cent,  of  the  raw  cotton,  practically  all  of  which  dates 
from  1880.  The  iron  industry  promises  to  make  even  greater 
strides:  in  North  Carolina.  Tennessee,  and  especially  in  Ala- 
bama, abundant  supplies  of  coal,  iron,  and  limestone  lie  so 
near  one  another  that  pig  iron  can  be  made  cheaper  there  than 
anywhere  else  in  America,  and  probably  in  the  w^orld.  The 
production  of  southern  pig  iron  increased  from  397,000  tons 
in  1880  to  2,500,000  tons  in  1900;  and  great  iron  foundries, 
steel  plants,  rolling,  and  rail  mills  sprang  up  at  Birmingham 
and  elsewhere  with  marvelous  rapidity.  In  1901  immense 
deposits  of  oil  were  discovered  in  Texas,  furnishing  a  cheap 
fuel  and  illuminant.     The  splendid   forests   of  hard   pine  and 


384      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

other  timber  throughout  the  South  were  reached,  cut,  and  sold, 
and  lumber  mills  were  started  at  numerous  points.  Manu- 
factures in  the  southern  States  have  had  to  depend  on  the 
labor  of  the  i)oor  whites;  the  negroes  have  not  shown  the  per- 
sistence necessary  for  factory  labor,  and  the  foreigners  who 
have  migrated  to  that  section  have  preferred  to  take  over  the 
farms  deserted  by  the  whites.  Child  lalDor  is  being  largely 
('mi)loyod.  and  the  industrial  transition  is  bringing  up  economic 
j)r()blems  wliicli  were  burning  questions  in  Xew  England  thirty 
to  forty  years  ago,  and  in  old  England  thirty  to  forty  years 
earlier  si  ill. 

317.  Motive  power  in  manufactures.^ — The  modern  factory 
depends  for  its  motive  power  no  longer  upon  the  unassisted 
nniscular  strength  of  man,  but  upon  the  energy  derived  from 
steam  or  water  power,  which  man  directs  instead  of  furnishing. 
Consequently,  the  progress  of  manufactures  in  a  country  can 
be  measured  better  by  the  amount  of  power  which  the}^  utilize 
than  l)y  the  numl^er  of  workmen  employed  or  even  the  volume 
of  goods  produced.  Tested  by  this  standard  the  United  States 
has  made  great  advances  during  the  past  two  decades^  the 
aggregate  motive  power  employed  in  manufactures  increasing 
over  200  per  cent.,  from  3,410,837  horse  power  in  1880  to 
11,300,081  horse  power  in  1900.  In  addition  to  this,  more  than 
2,500,000  horse  power  are  used  by  the  electric  railways  and 
central  lighting  stations.  The  tendency  of  machine  produc- 
tion to  concentrate  in  large  establishments  is  shown  very 
cleaiiy  l>y  the  great  increase  in  the  average  horse  power  per 
establisiimciit .  which  grew  from  9  in  1870  to  40  in  1880  and  67 
in  1900.  A(  the  same  time  the  tendency  toward  great  opera- 
tions and  the  use  of  large  and  powerful  machinery,  which  has 
been  so  characteristic  of  our  recent  industrial  development,  is 
ilhist  rated  l)y  a  similar  increase  in  the  number  of  horse  power 
per  machine. 

The  most  striking  feature  in  the  application  of  power  to 
industrial  uses  is  the  increasing  utilization  of  electricity,  which 
grew  twenty-fold  between  1890,  when  its  use  may  be  said  to 


MANUFACTURING    ON   A    LARGE   SCALE  385 

have  begun,  and  1900.  "  The  transmission  of  electric  energy, 
a  discovery  of  the  closing  years  of  the  nineteenth  century,  can 
be  compared  in  importance  with  the  application  of  steam  to 
the  production  of  power,  rendered  practical  for  the  first  time 
at  the  end  of  the  eighteenth."  Although  it  still  furnishes  but 
a  small  proportion  of  the  total  power  used,  the  chief  impor- 
tance of  electricity  lies  in  its  promises  for  the  future.  A  great 
improvement  was  made  when  the  introduction  of  the  alter- 
nating current  permitted  the  transmission  of  electricity  over 
distances  previously  thought  prohibitive.  On  the  Pacific 
Coast  and  in  the  South,  magnificent  supplies  of  water-power 
have  been  directed,  in  the  form  of  electricity,  to  distant  mining 
and  manufacturing  operations  which  would  otherwise  have 
been  impossible. 

318.  Patents  in  manufactures.  —  If  we  may  judge  by  the 
increasing  number  of  patents  granted  in  the  United  States  during 
the  past  two  and  a  half  decades,  inventive  genius  has  not  been 
idle.  From  13,000  in  1880  the  number  grew  to  32,000  in  1906, 
which  is  the  largest  number  ever  recorded  for  a  single  year. 
While  not  all  of  these  applied  to  the  art  of  manufacturing,  they 
influenced  its  growth  and  called  into  existence  a  number  of 
new  manufacturing  industries.  Some  of  those  which  date  prac- 
tically since  1880  are  as  follows:  bicycles  and  tricycles,  elec- 
trical apparatus  and  supplies,  dynamite  and  smokeless  powder, 
chemical  fire  extinguishers,  glucose,  oleomargarine,  fountain 
and  stylographic  pens^  phonographs  and  graphophones,  cash 
registers,  rubber  goods,  typewriters  and  supplies.  The  value  of 
electrical  apparatus  alone  in  1900  was  $91,000,000,  and  the  total 
value  of  the  products  named  above  was  almost  $300,000,000. 
Not  only  have  the  mechanical  and  agricultural  industries  been 
in  many  cases  revolutionized,  but  the  means  of  communication, 
transportation,  trade,  and  even  social  intercourse  have  been 
greatly  modified  or  changed.  The  improvements  in  the  tele- 
phone, the  invention  of  the  typewriter  and  the  linotype  machine, 
of  the  cash  register,  of  various  medicines  and  serums,  of  the 
steel  frame  building,  electric  lighting,  wireless  telegraphy,  etc., 
26 


386      ECONOMIC    HISTORY    OF    THE    UNITED   STATES 


serve  to  suggest  some  of  the  numerous  points  at  which  our 
lives  are  affected  by  the  inventions  patented  during  the  last 
generation. 

319.  The  textile  industry.  —  The  growth  of  the  textile  in- 
dustry has  kept  pace  with  the  general  industrial  development 
of  the  country,  the  value  of  the  products  of  the  combined 
textiles  having  increased  almost  60  per  cent,  between  1880  and 


Heavy  Worsted  Loom 
Up  to  tho  timo  of  the  Civil  War  domostic  producers  were  handicapped 
\>y  lack  of  effective  machinery,  hut  some  original  inventions  ahout 
ISO;^  paved  the  way  for  the  expansion  of  the  woolen  industry.  Tho 
cut  shows  an  American  loom  for  weaving  the  heaviest  grades  of 
worsted  and  woolen  fabrics. 

1900.  If  to  the  textile  manufactures  proper,  which  include 
cotton,  woolen,  and  silk  goods,  hosiery  and  knit  goods,  flax, 
henij),  and  jute,  and  dyeing  and  finishing,  we  add  the  clothing- 
industry,  we  obtain  a  gross  value  of  products  amounting  to 
over  $1,600,000 ,000.  The  magnitude  of  the  industry  will 
perhaps  be  illustrated  best  by  a  comparative  table,  showing  its 
i'n>\vtli  since  ISSO: 


MANUFACTURING    ON   A    LARGE   SCALE  387 

Comparative  Summary  of  the  Combined  Textile  Industries 


Year 

Number  of 
Establishments 

Capital 

Number  of 
Wage- 
earners 

Cost  of 
Materials 

Value  of 
Products 

1880 
1890 
1900 

4018 
4276 
4312 

$412,721,496 

767,705,310 

1,042,997,577 

382,136 
517,237 
661,451 

$302,709,894 
447,546,540 
521,345,200 

$532,673,488 
759,262,283 
931,494,566 

Large  as  these  figures  appear,  the  domestic  production  of 
textile  goods  still  falls  short  of  the  home  consumption  by  some 


1 

i 

J 

1 

m 

« 

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ffffp'  '■ 

i^Si?^ 

1 

1         ,  , 

Spooling  Room,  Pacific  Mills,  Lawrence,  Mass. 
A  spooling  machine  is  a  machine  for  winding  the  spun  thread  on 
spools!     The  work  is  simple,  the  chief  task  being  to  replace  the  filled 
spools  with  empty  ones,  and  a  single  operative  can  therefore  man- 
age a  number  of  machines. 

$56,000,000.  American  manufacturers  have,  however,  steadily 
supplied  a  larger  and  larger  proportion  of  the  home  demand, 
and  to-day  have  almost  fully  occupied  the  domestic  market. 


388      ECONOMIC   HISTORY    OF    THE    UNITED   STATES 

Even  in  the  manufacture  of  silk  goods,  whose  growth  is  but  of 
yesterday,  they  supply  80  per  cent,  of  the  total  consumption; 
in  1870  the  domestic  manufactures  contributed  but  33  per 
cent,  to  the  total.  In  comparison  with  other  nations  the  United 
States  in  1900  ranked  second  as  a  manufacturer  of  textiles, 
being  surpassed  only  by  Great  Britain  in  the  production  of  cot- 
ton and  woolen  goods  and  by  France  in  silk  goods.  The  rank 
of  the  various  countries  is  probably  shown  most  fairly  by  the 
number  of  spindles  in  operation;  judged  by  this  test  the  five 
leading  industrial  nations  stood  as  follows:  United  Kingdom, 
45.000,000;  United  States,  18,591,000;  Germany,  7,156,000; 
Russia,  6,091.000;  France,  5,039,000. 

The  textile  industry  in  the  United  States  is  essentially  gre- 
garious, being  largely  concentrated  in  the  New  England  States, 
and  Pennsylvania,  New  York,  and  New  Jersey.  The  pre- 
dominance of  New  England,  however,  which  in  1880  had  two 
thirds  of  the  capital  employed  in  textile  manufactures,  has 
been  greatly  affected  by  the  rapid  advance  of  cotton  manu- 
factures in  the  southern  States. 

320.  The  iron  and  steel  industry.  —  No  industry  in  the 
United  States  has  shown  greater  rapidity  of  development, 
more  extreme  concentration,  or  larger  wealth  of  resources  than 
the  iron  and  steel  industry.  Its  evolution  on  a  large  scale  did 
not  begin  until  about  1887,  as  is  seen  in  the  following  brief  table: 

Comparative  Summary  of  the  Iron  and  Steel  Industry, 
1880-1900. 


Year 


1880 
1890 
1900 


Number  of 

E.stal)lish- 
ments 


792 
719 


Capital 


$209,904,905 
414.044,844 
590.530,484 


Number 
of  Wage- 
earners 


140,798 
171,181 
222,007 


Cost  of 
Materials 


Value  of 
Products 


$191,271,150  $290,557,085 


327,272,845 
522,431,701 


478,087,519 
804,034,918 


Tons  of 
Products 


0,480,733 
10,264,478 
29,507,860 


The  iron  and  steel  industry  falls  into  two  general  divisions: 
the  first  comprises  the  production  of  pig  iron,  and  the  second 


MANUFACTURING    ON   A    LARGE   SCALE 


389 


the  conversion  of  pig  iron  into  commercial  iron  and  steel  and 
the  manufacture  of  various  products.  The  United  States  has 
for  some  years  produced  more  pig  iron  than  any  other  country 
in  the  world;  in  1902  she  produced  over  40  per  cent,  of  the 
world's  supply,  or  more  than  Great  Britain  and  Germany 
combined,   which   held   second    and   third   rank   respectively. 


^    L 

IIUJJ 

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9mm 

Blast  Furnace,  Youngstown,  Ohio 
The  ore,  with  limestone  and  coke,  is  smelted  in  cylindrical  furnaces, 
often  100  feet  in  height,  by  means  of  a  hot-air  blast.  As  the  iron 
melts,  it  is  drawn  off  through  an  opening  at  the  bottom  of  the  fur- 
nace, the  lighter  slag  being  drawn  off  through  a  higher  opening.  The 
furnace  is  continually  charged  anew  at  the  top,  and  sometimes  runs 
for  months  without  stopping. 

The  most  striking  feature  of  the  iron  industry  in  the  United 
States  is  its  concentration  m  large  establishments,  where  the 
most  improved  machinery  is  employed.  From  341  in  1880 
the  number  of  establishments  declined  to  224  in  1900,  although 
the  number  of  tons  of  pig  iron  produced  during  the  same  period 
rose  from  3,375,912  to  14,452,234  tons.     At  the  same  time  the 


390       ECONOMIC   HISTORY    OF    THE    UNITED   STATES 

average  capacity  of  the  blast  furnaces  increased  from  25  tons 
per  da}^  in  1880  to  148  tons  twenty  years  later.  In  one  of  the 
mammoth  furnaces  of  the  Carnegie  Company  a  daily  produc- 
tion of  901  tons  was  obtained  for  the  month  of  June,  1902. 
Another  change  has  taken  place  in  the  fuel  used,  bituminous 
coal  and  coke  having  almost  completely  supplanted  anthracite 
coal  and  charcoal.  Pig-iron  production  is  strongly  centralized 
in  three  great  centers.  Pennsylvania  and  Ohio  constitute  one 
field  in  which  coal  is  abundant  and  cheap,  and  to  whose,  fur- 
naces iron  ore  from  the  prolific  and  easily  worked  Lake  Superior 
mines  may  be  cheaply  shipped  by  way  of  the  Great  Lakes; 
nearly  two  thirds  of  the  pig  iron  was  produced  in  these  two 
States  in  1900.  Illinois  forms  a  second  field  and  Alabama  and 
Tennessee  a  third. 

321.  The  manufacture  of  steel.  —  The  principal  change  that, 
has  occurred  in  the  iron  and  steel  industry  in  the  last  generation 
has  been  the  substitution  on  a  large  scale  of  steel  for  iron  prod- 
ucts. In  the  United  States  less  than  one  third  of  the  pig  iron 
])r()duced  in  1880  was  converted  into  steel;  in  1900  about  four 
fifths  was  so  converted.  Steel  rails  have  completely  supplanted 
iron  ones,  only  a  few  tons  of  the  latter  being  produced  in  1900. 
The  use  of  steel  for  the  construction  of  large  office  buildings, 
bridges,  cars,  wire  and  wire  nails,  is  of  recent  growth;  but  in 
these  and  a  thousand  other  products  a  new  demand  has  been 
created  for  steel.  Another  important  change  in  the  steel 
industry  is  the  process  by  which  it  is  made.  A  revolution  was 
effected  in  the  industry  when  Bessemer  steel  was  first  manu- 
factured in  1864  and  began  to  supplant  iron.  The  age  of 
Bessemer  steel,  however,  is,  according  to  Mr.  Carnegie,  already 
passing  away,  "  to  be  succeeded  by  the  age  of  Siemens  open- 
hearth  steel." 

Bessemer  steel  is  made  by  running  the  molten  iron  into  a 
converter;  a  cold  blast  of  air  is  then  blown  through  the  metal  at 
high  pressure  to  eliminate  the  carbon.  This  process  can  be 
employed  only  with  iron  which  does  not  contain  more  than  a 
thousandth  part  of  phosphorus.     In  the  open-hearth  process 


MANUFACTURING    ON    A    LARGE    SCALE 


391 


the  pig  iron  is  mixed  with  scrap-iron  in  a  brick-lined  furnace, 
and  when  molten  the  other  elements  desired  are  added;  the 
advantage  of  this  method  is  that  it  permits  the  conversion  into 
steel  of  pig  iron  which  contains  as  much  as  10  per  cent,  of 


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.-»                 — 

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i    

Rolling  Mill  at  Edgar  Thomson  Works,  Pittsburg 
The  three  principal  methods  of  working  metals  are  founding,  forging, 
and  rolling,  and  of  these  three  methods  that  of  rolling  has  been  chiefly 
instrumental  in  extending  the  use  of  iron  and  steel  for  structural  pur- 
poses to  its  present  enormous  proportions.  Rolling  consists  in  work- 
ing metal  ingots  into  rails,  bars,  plates,  rods,  and  structural  shapes  by 
passing  them  repeatedly  when  intensely  hot  between  cylindrical  rolls. 
Generally  each  set  of  rolls  has  two  or  more  grooves,  each  set  of  which 
approaches  more  closely  to  the  form  of  the  finished  piece  than  the  set 
of  grooves  preceding  it,  and  the  metal  is  passed  through  these  grooves 
in  order.  Commonly  also  several  sets  of  rollers  are  employed,  each 
set  of  which  brings  the  piece  closer  to  its  final  form  than  the  set  pre- 
ceding. In  the  illustration  is  shown  a  white-hot  ingot  being  guided  to 
a  set  of  rolls. 

phosphorus.  The  basic  open-hearth  method  is  thus  well  adapted 
for  use  in  the  southern  States,  w^here  the  ore  is  decidedly  impure. 
The  steel  industry  also  shows  the  same  expansion  and  concentra- 
tion into  huge  establishments  with  machinery  of  great  capacity. 


392      ECONOMIC    HISTORY    OF    THE    UNITED   STATES 

The  average  capacity  of  a  Bessemer  converter  has  trebled  (5 
to  15  tons)  between  1880  and  1900,  and  the  capacity  of  the 
average  open-hearth  furnace  has  quintupled  in  the  same  period 
(10  to  50  tons).  At  the  same  time  the  total  daily  capacity  of 
the  steel  mills  of  the  country  has  increased  from  20,000  to 
90,000  tons.  Not  only  has  the  size  of  the  single  establishment 
grown,  but  the  number  of  hitherto  separate  industries  com- 
bined under  one  organization  has  greatly  enlarged:  iron  and 
coal  mines,  railways  and  steamers,  coke  ovens  and  blast  fur- 
naces, steel  plants  and  machine  shops,  have  all  been  brought 
together  under  a  single  head,  as  in  the  case  of  the  United  States 
Steel  Corporation. 

322.  Other  industries.  —  The  census  of  1900  enumerates 
354  distinct  industries;  of  these  the  sixteen  following  turned 
out  products  with  a  gross  value  of  more  than  $200,000,000 
during  the  year  1900: 

Iron  and  steel  $804,000,000 

Slaughtering  and  meat  packing 790,000,000 

Foundry  and  machine  shop  products 645,000,000 

Lumber  and  timber  products 567,000,000 

Flouring  and  grist  mill  products 561,000,000 

Men's  clothing 415,000,000 

Printing  and  publishing 347.000,000 

Cotton  manufactures  . 339,000,000 

Carpentering 316,000,000 

Woolen  manufactures 297,000,000 

Boots  and  shoes 261,000,000 

Sugar  and  molasses  refining 241,000,000 

Malt  liquors 237,000,000 

Cars  and  railroad  shop  construction 218,000,000 

Leather 204,000,000 

Masonry,  brick,  and  stone   203,000,000 

From  this  list  it  will  be  seen  that  the  most  important  manu- 
factures consist  in  working  over  the  raw  material;  the  value 
added  by  the  process  of  manufacture  is  not  yet  as  great  as  the 
value  of  the  raw  material.  In  the  younger  and  smaller  manu- 
facturing industries  the  reverse  is  probably  true.     These  in- 


MANUFACTURING    ON   A    LARGE   SCALE 


393 


dustries  are  scattered  over  the  whole  country,  though  four  of 
the  States  are  pre-eminently  industrial,  each  showing  products 
worth  more  than  $1,000,000,000  in  1900:  these  were  New  York, 
Pennsylvania,  Illinois,  and  Massachusetts.  Only  two  others 
have  a  product  value  of  over  $500,000,000,  namely  Ohio  and 
New  Jersey. 

323.  The  mining  industry.  —  The  industrial  supremacy  of 
the  United  States  rests  so  firmly  upon  the  rich  mineral  re- 
sources of  the  country  that 
it  is  desirable  to  note  briefly 
in  connection  with  manu- 
factures the  progress  of  the 
mining  industry  also.  In 
the  production  of  the  three 
mineral  products  which  are 
most  essential  to  modern 
industry  —  coal,  iron,  and 
copper  —  the  United  States 
leads  all  other  nations;  it 
also  stands  first  in  the  pro- 
duction of  petroleum,  phos- 
phate of  lime,  lead,  gold, 
silver,  and  aluminum,  and 
second  in  the  production  of 
zinc.  In  1900,  for  the  first 
time,  the  total  value  of  the 
commercial  mineral  produc- 
tion exceeded  the  enormous 
sum  of  $1,000,000,000;  and 
by  1905  was  one  half  as 
much  again.     This  was  an 

increase  from  $369,000,000  in  1880,  and  $619,000,000  in  1890. 
The  following  table  shows  the  growth  of  the  mineral  industries 
from  1880: 


Mixers  at  Work 
In  the  ordinary  mine  the  rock  must 
be  drilled  and  the  holes  charged  with 
explosives.  The  rock  and  ore  blasted 
off  are  then  taken  to  the  surface 
to  be  separated  and  treated.  The 
illustration  shows  miners  at  work 
in  a  drift  in  a  shaft  iron  mine.  The 
cost  of  such  underground  iron  min- 
ing is  about  SI. 00  a  ton,  as  against 
10  to  50  cents  a  ton,  in  an  open  pit 
mine. 


GF  THE 

UNIVERSIT 


394      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 
Selected  Mineral  Products  of  the  United  States,    1880-1905 


While  the  total  value  of  the  mineral  products  lags  far  be- 
hind the  values  of  agriculture  and  of  manufactures,  the  rate  of 
increase  since  1880  has  been  much  more  rapid.  Two  thirds 
of  the  mineral  wealth  was  obtained  from  the  northern  States, 
and  especially  in  those  sections  where  coal  and  iron  were  being 
mined.  The  most  important  mining  States,  in  order,  were 
Pennsylvania,  Ohio,  Michigan,  West  Virginia,  and  Colorado. 

324.  Tariff  changes.  —  In  spite  of  the  reductions  in  the 
1/  internal  revenue  system  made  after  the  war,  the  receipts  of 
the  government  increased  rapidly  and  by  1881  there  was  a 
surplus  of  $101,000,000  in  the  treasury.  A  further  reduction 
was  made  in  1883  in  the  excise  duties  by  lowering  the  rate  on 
tobacco  by  one  half  and  by  abolishing  some  other  unimpor- 
tant and  irritating  taxes,  such  as  those  on  bank  deposits, 
capital  and  checks,  friction  matches,  patent  medicines,  per- 
fumery, etc.  The  effect  on  the  increasing  surplus  was  slight, 
and  the  feeling  was  strong  throughout  the  country  that  a 
similar  reduction  should  be  made  in  the  tariff  duties.  A  tariff 
commission,  appointed  by  President  Arthur  in  1882,  recom- 
mended "a  substantial  reduction  of  tariff  duties  "  of  from  20 
to  25  per  cent.  Congress,  however,  in  which  the  protectionist 
sentiment  was  strong,  refused  to  sanction  such  a  radical  change, 
and  in  the  tariff  act  of  1883  made  an  average  reduction  of  only 
5  per  cent.;  the  principal  reductions  took  place  in  those  manu- 
factures  which   were   least    affected   by   foreign    competition. 


MANUFACTURING    ON   A    LARGE   SCALE  395 

After  several  unsuccessful  attempts  at  tariff  revision  by  the 
Democrats,  who  had  gained  control  of  the  House  in  the  elec- 
tions of  1884,  President  Cleveland  at  length  sharply  defined 
the  issue  in  his  annual  message  of  December,  1887,  by  demand- 
ing the  reduction  of  the  tariff  and  the  admission  of  free  raw 
materials. 


Shaft  Iron  Mine 
Until  the  discovery  of  the  rich  ore  beds  of  the  Lake  Superior  regions, 
where  the  ore  is  dug  out  of  an  open  pit  by  steam  shovels,  practi- 
cally all  the  iron  mined  in  the  United  States  was  situated  at  a  dis- 
tance below  the  surface  and  had  to  be  approached  by  shafts,  as  is  the 
case  in  Great  Britain  and  Europe.  Mine  cars  are  sometimes  run 
out  of  the  shaft  of  the  mine  on  to  a  trestle,  as  shown  in  the  illustra- 
tion, from  which  the  ore  passes  down  a  chute  to  the  railway  cars. 

The  elections  of  1888  resulted  in  a  victory  for  the  Repub- 
lican party,  which  construed  it  as  an  endorsement  of  their 
policy  of  high  protection.  Accordingly,  the  McKinley  Act  of 
1890  was  passed,  greatly  increasing  the  general  level  of  duties, 
from  38  to  49.5  per  cent.     The   "  pauper  labor  "   argument 


396      ECONOMIC   HISTORY   OF    THE    UNITED   STATES 

was  used  with  great  effect  in  the  debate  on  this,  bill,  and  pro- 
tectionism was  now  advocated,  not,  as  Hamilton  had  argued, 
as  a  temporary  aid  to  young  industries,  but  as  a  permanent 
policy.  The  bill  imposed  higher  protective  duties  upon  wool, 
the  finer  grades  of  woolen  and  cotton  goods,  cutlery  and  tin 
plate,  etc.,  and  extended  them  so  as  to  cover  a  number  of 
agricultural  commodities.  Sugar  w^as  put  on  the  free  list,  a 
bounty  was  granted  on  sugar  produced  in  the  United  States, 
and  reciprocity  was  provided  for.  At  the  same  time  the  accu- 
mulating surplus  was  disposed  of  by  new  and  extravagant 
appropriations  for  pensions  and  other  purposes.  This  tariff 
policy  was  quickly  reversed  by  a  Democratic  Congress,  by  the 
passage  of  the  Wilson  Act,  which  placed  wool,  copper,  and 
lumber  upon  the  free  list,  reduced  the  duties  on  many  pro- 
tected commodities,  and  reimposed  a  revenue  duty  upon  raw 
sugar.  The  average  level  of  duties  under  this  act  was  39.9 
per  cent.  It  also  contained  a  clause  providing  for  an  income 
tax  of  2  per  cent,  on  all  incomes  over  $4000,  but  this  section 
was  declared  unconstitutional.  The  victory  of  the  Repub- 
licans two  years  later  led  to  another  revision  of  the  tariff  and 
the  passage  of  the  Dingley  tariff  of  1897,  which  raised  the 
general  average  of  duties  to  the  highest  point  since  the  Civil 
War,  namely,  57  per  cent. 

325.  Commercial  policy  and  reciprocity.  —  The  key-note  of 
our  commercial  policy  has  from  the  very  beginning  been  the 
reservation  of  the  home  market  for  the  domestic  manufacturer, 
and  the  exclusion  of  foreign  competition.  Especially  after  the 
highly  restrictive  period  of  the  Civil  War  has  this  played  an 
important  role.  Such  a  policy  has  necessarily  been  a  one- 
sided one,  and  its  inconvenience  has  more  than  once  been  felt 
as  our  agricultural  exports  have  sought  foreign  markets  and 
especially  since  the  period  of  our  recent  industrial  expansion. 
Spasmodic  efforts  had  been  made  to  secure  reciprocity  treaties 
with  a  few  foreign  nations,  but  little  of  permanent  value  was 
accomplished  before  1889.  In  that  year  a  Pan-American 
Congress   met   in   Washington,    consisting   of   delegates  from 


MANUFACTURING   ON   A    LARGE   SCALE  397 

most  of  the  Central  and  South  American  countries.  Among 
other  things  they  recommended  reciprocity  treaties,  and  the 
tariff  act  of  1890  accordingly  gave  the  President  authority  to 
establish  by  treaty  commercial  relations  on  a  basis  of  reci- 
procity. The  basis  of  the  policy  was  that  the  United  States 
would  admit  free  of  duty  sugar,  molasses,  coffee,  and  hides,  if 
the  nations  exporting  these  commodities  would  receive  on  a 
just  basis  our  agricultural  and  other  products.  It  was  designed 
to  apply  particularly  to  the  Central  and  South  American 
countries,  and  treaties  were  made  with  several  of  them;  of 
European  nations,  Germany,  France,  and  Austria-Hungary 
alone  made  such  agreements.  The  principle  of  reciprocity  was 
reaffirmed  by  the  Dingley  Act  of  1897,  although  it  has  not 
been  extended  in  practice  since  that  time. 

SUGGESTIVE  TOPICS   AND  QUESTIONS.     CHAPTER  XXVI 

1.  Describe  the  recent  industrial  development  of  Germany.  [Webster, 
General  Hist,  of  Com.,  457-468;  Williams,  Made  in  Germany;  Dawson,  Pro- 
tection in  Germany;  No.  Amer.  Rev.,  CLXVI,  54;  Econ.  Journ.,  XI,  565.] 

2.  Describe  the  recent  industrial  development  of  England.  [Webster, 
General  Hist,  of  Com.,  446-456;  Gibbins,  Industry  in  Engl.,  454-474; 
Cheyney,  Intro,  to  Ind.  and  Soc.  Hist,  of  Engl.,  199-311;  No.  Amer.  Rev., 
CLXIX,  544;  Econ.  Journ.,  X,  295-307.] 

3.  Illustrate  in  greater  detail  the  economies  effected  by  concentration 
in  large  establishments.  [Twelfth  Census,  X,  723;  Rep.  of  Industr.  Com.,  I, 
68,  and  "Economies  of  Comb."  in  Gen'l  Index  of  Testimony;  Jenks,  The 
Trust  Problem,  chap.  2;  Mussey,  Combination  in  the  Minirig  Industry.] 

4.  What  connection  is  there  between  the  growth  of  cities  and  manu- 
facturing?    [Twelfth  Census,  VII,  218,  256;  Weber,  Growth  of  Cities.] 

5.  What  is  the  principal  manufacturing  industry  of  your  home? 
Why  was  it  situated  there? 

6.  Is  the  West  likely  to  become  a  manufacturing  section?  Give 
your  reasons. 

7.  To  what  extent  has  child  labor  been  employed  in  manufacturing? 
What  is  the  situation  in  the  South  to-day?  [Wright,  Practical  Sociology, 
214;  Hunt,  Workers  at  Gainful  Occupations;  Willoughby  and  de  Graf- 
fenried.  Essays  on  Child  Labor.] 

8.  Mention  the  chief  economies  due  to  the  use  of  electricity  in  manu- 
factures. [Twelfth  Census,  VII,  327;  Leroy  Beaulieu,  214-216;  Morrison, 
The  New  Epoch.] 


398      ECONOMIC   HISTORY    OF    THE    UNITED   STATES 

9.  What  are  some  of  the  notable  achievements  in  the  generation  and 
transmission  of  electric  power?  [Twelfth  Census,  VII,  322;  consult  Poole's 
Index  for  additional  references.] 

10.  Describe  the  utilization  of  wastes  and  by-products  in  the  more 
important  industries.  [Twelfth  Census,  X,  723-748;  Kittredge,  Utiliza- 
tion of  Wastes,  in  Sci.  Amer.  SuppL,  LIV,  22462,  22478,  22498,  22518.] 

11.  Trace  the  growth  of  some  one  industry  that  has  shown  especially 
rapid  growth,  and  give  the  principal  reasons  therefor.  [Twelfth  Census, 
IX,  X.] 

12.  Describe  the  iron  ore  supplies  of  the  Lake  Superior  region,  and 
the  labor-saving  ore-mining  and  handhng  devices  used.  [Taussig,  in  Quart. 
Journ.  Econ.,  XIV,  156-7;  Rep.  of  Brit.  Iron  Trade  Com.,  30-47,  105-109, 
412;  Mussey,  Combination  in  the  Mining  Industry.] 

13.  Descril^e  the  organization  and  management  of  the  Carnegie 
Company,  the  National  Cash  Register,  or  other  large  company.  [Rep.  of 
Brit.  Iron  Trade  Com.,  74-84;  Rep.  Ind.  Com.,  vols.  VII,  XIV;  Meade, 
Trust  Finance,  chap.  11.] 

14.  Is  there  any  connection  between  the  industrial  development  of 
the  United  States  and  the  ri.se  of  protectionism  in  England?  [W.  J. 
Ashley,  The  Tariff  Problem,  chaps.  4,  5.] 

15.  Is  the  ''agrarian"  policy  of  Germany  good  for  that  country? 
[Dawson,  Protection  in  Germany;  Ashley,  Modern  Tariff  Hist.,  106,  113  ff.] 

16.  Has  the  total  wealth  of  the  United  States  been  increased  by  the 
pohcy  of  protection?     [Bullock,  348,  354;  Taussig,  Tar.  Hist.,  361  ff.] 

17.  Products  from  the  Philippines  paid  import  duties  upon  l)eing 
imported  into  the  United  States  before  annexation;  if  after  annexation 
they  were  admitted  free,  who  would  gain  and  who  lose? 

18.  What  were  the  reciprocity  features  of  the  tariff  act  of  1890? 
[Act  of  1890,  sec.  3;  Laughlin  and  Willis,  Reciprocity,  chaps.  0,  7;  Taussig, 
Tar.  Hist.,  278.] 

19.  What  were  the  provisions  of  the  act  of  1897  relating  to  reciprocity? 
How  did  they  compare  with  those  in  the  act  of  1890?  [Act  of  1897, 
sects.  3,  4;  Laughlin  and  Willis,  Reciprocity,  chap.  9;  Taussig,  Tar. 
Hist.,  352;  Ashley,  Mod.  Tariff  Hist.,  part  2,  chap.  8;  Osborne,  Reci- 
procity in  the  Amer.  Tariff  System,  in  Annals,  XXIII,  no.  1.] 

20.  What  are  the  "infant  industries"  and  "pauper  labor"  argu- 
m.ents  in  favor  of  protection?  Are  they  valid  to-day?  [Bullock,  Intro., 
361;  Seager,  Intro.,  372-5;  Walker,  Polit.  Econ.,  511.] 

SELECTED   REFERENCES.     CHAPTER   XXVI 

*  Ashley:  Modern  Tariff  History,  212-262. 

** Twelfth  Census  (1900),  vols.  VII-X. 

** Industrial  Commission  Report,  vols.  VII,  XIV,  XIX,  585-594. 


MANUFACTURING    ON    A    LARGE   SCALE  399 

*Jeans  (Ed.):  American  Industrial  Conditions  and  Competition,  Report 

of  British  Iron  Trade  Commission. 
**Leroy-Beaulieu :  The  United  States  in  the  Twentieth  Centurj^  157-336. 
*Taussig:  Tariff  History  of  the  United  States,  230-283. 

Laughhn  and  WiUis:  Reciprocity,  chaps.  6-9. 

Lawson:  American  Industrial  Problems,  chaps.  8,  9,  12,  13,  20,  26,  29. 

Monthly   Summary   of  Commerce   and    Finance,    February,   April, 

August,  December,  1900. 

Mosely  Industrial  Commission  Report. 

Stanwood:  American   Tariff   Controversies    in    the    Nineteenth    Century, 

II,  chaps.  15-18. 
Taussig:  The  Iron  Industry  in  the  United  States,  in  Quarterly  Journal  of 

Economics,  XIV,  475-508. 


CHAPTER   XXVII 
INDUSTRIAL  COMBINATIONS 

326.  Tendency  toward  combination.  —  We  have  seen  how 
rapidly  the  industrial  expansion  of  the  United  States  after  the 
Civil  War  led  to  an  increase  in  the  size  of  manufacturing  enter- 
prises. The  old-fashioned  methods  of  petty  producers  with 
small  capital  were  insufficient  to  develop  the  wealth  of  natural 
resources  lying  open  to  the  people,  and  they  were  steadily 
supplanted  by  establishments  of  growing  size  and  complexity. 
But  not  merely  did  the  size  of  the  single  establishment  grow; 
the  characteristic  feature  of  the  industrial  development  of  the 
last  two  decades  of  the  nineteenth  century  was  the  combina- 
tion of  hitherto  independent  businesses  into  single  concerns 
with  centralized  management.  Industry  began  to  be  organized 
and  carried  on  by  the  great  captains  of  industry,  small  inde- 
pendent producers  to  disappear,  and  laborers  to  be  marshaled 
in  bodies  of  a  thousand  men  or  more.  Inequalities  in  the  dis- 
tribution of  wealth  and  the  growth  of  a  distinct  wage-earning 
class  offered  new  economic  problems  for  solution. 

Until  the  construction  of  adequate  transportation  facilities, 
the  average  business  establishments  in  the  United  States  were 
essentially  local  in  their  nature,  supplying  a  comparatively 
narrow  market  and  using  a  small  capital.  With  the  rapid 
extension  of  the  railway  system  after  the  Civil  War,  it  became 
possible  to  expand  operations  over  a  wider  territory,  to  localize 
and  concentrate  manufactures,  and  to  use  larger  masses  of 
capital  in  a  single  establishment.  With  the  widening  of  the 
market  there  went  on,  therefore,  an  expansion  of  the  business 
unit,  and  the  modern  trust  became  an  economic  possibility. 

327.  Organization  of  American  industry.  —  The  early  rise 
of  corporations  with  limited  liability,  sever.ty-five  years  ago, 
has  already  been  alluded  to.  With  the  urgent  and  growing 
demand  at  that  time  for  better  means  of  communication  and 

400 


INDUSTRIAL    COMBINATIONS 


401 


transportation  and  internal  improvements  of  every  kind,  the 
Federal  and  State  governments  both  attempted  to  meet  this 
need.  After  their  disastrous  failure  and  withdrawal  from  this 
field  of  enterprise,  the  growth  of  private  corporations  to  carry 
on  the  work  was  inevitable  and  necessary.  In  spite  of  early 
abuses  this  form  of  business  enterprise  soon  justified  itself,  and 
since  that  time  there  has  been  a  steady  shifting  of  capital  from 
private  independent  management  to  corporate  control.  The 
corporation  with  limited  liability  offered  special  facilities  for 
doubtful  A^entures  in  the  way  of  railroad  building  and  similar 
improvements,  and  speedily  grew  in  favor.  Even  industrial 
enterprises,  such  as  manufacturing  concerns,  began  generally  to 
be  organized  under  this  form;  indeed,  the  growth  in  the  number 
of  corporations  has  been  nearly  identical  with  the  increase  of 
large-scale  production  and  concentration  of  production.  Omit- 
ting the  hand  trades  from  consideration,  the  following  table 
shows  that  while  only  an  eighth  of  the  industrial  establishments 
in  the  United  States  in  1900  were  corporate  in  form,  they 
turned  out  nearly  two  thirds  of  the  goods  manufactured: 

Forms  of  Organizatiox  of  Manufacturing  Establishments, 

1900. 


Form 

Number  of 
Establish- 
ments 

Per  cent. 

Value  of  Pro- 
duct (in 
millions) 

Per 

cent. 

Individual  manufacturers 

189,180 

67,125 

38,052 

2,093 

63.2 

23.4 

12.7 

0.7 

$1,897 

2,260 

7,633 

31 

16.0 
19.1 

Corporations 

Cooperative  societies,  etc. 

64.6 
0.3 

Total 

296,450 

100.0 

11,821 

100.0 

328.  Early  attempts  at  combination.  —  Under  the  pressure 
of  these  forces  the  movement  towards  industrial  reorganization 
began.  Various  devices  had  been  resorted  to  for  the  purpose 
of   restricting    competition,    of   which   the   earliest    and    most 

27 


402      ECONOMIC   HISTORY    OF    THE    UNITED   STATES 

common  was  an  agreement  between  competing  producers  to 
fix  prices  or  to  limit  output,  as  in  the  case  of  the  railroads  and 
anthracite  coal  mines;  a  second  method  was  the  establishment 
of  a  common  selling  bureau,  as  illustrated  by  the  Michigan 
Salt  Association.  These  agreements  were  extremely  loose  and 
constantly  broken  by  the  members  under  the  temptation  of 
higher  profits.  A  stronger  form  of  organization,  involving 
more  complete  control  over  the  separate  establishments,  was 
felt  to  be  necessary,  and  under  the  leadership  of  John  D.  Rocke- 
feller, the  Standard  Oil  Company  was  reorganized  as  a  ''  trust" 
in  1882.  According  to  this  scheme  a  board  of  nine  trustees  was 
selected  to  whom  the  stockholders  surrendered  their  stock, 
receiving  in  return  trust  certificates;  the  trustees  then  operated 
all  the  plants  in  harmony,  and  divided  the  profits  among  the 
holders  of  the  trust  certificates. 

The  success  of  this  new  combination  led  to  the  formation 
of  similar  arrangements  in  the  manufacture  of  whisky,  sugar, 
lead,  cottonseed  oil,  starch,  etc.  Hostile  legislation  and  adverse 
decisions  of  the  courts  forced  the  trusts  to  change  their  form 
about  1890.  The  trusts  were  dissolved,  but  in  legal  form  only, 
for  the  combinations  continued  under  other  names.  Instead 
of  a  combination  of  several  distinct  companies,  the  various 
properties  were  now  united  into  a  single  corporation.  Indus- 
trial consolidation  is  accordingly  the  final  stage  in  the  evolu- 
tion of  combination.  Several  of  the  States,  notably  New 
Jersey,  have  passed  laws  favorable  to  corporations  wishing  to 
reorganize  under  this  form  for  an  interstate  business.  While 
the  technical  "  trust  "  has  been  legally  destroyed,  the  name 
survives  as  a  designation  for  all  large  combinations  of  capital, 
especially  if  they  are  thought  to  possess  monopoly  power. 

329.  The  trust  movement.  —  The  early  combinations,  though 
important,  were  fe\\'  in  number.  It  remained  for  the  closing 
years  of  the  nineteenth  century  to  witness  the  wholesale  re- 
organization of  manufacturing,  transportation,  and  trading 
enterprises  into  industrial  combinations. 

According  to  a  competent  financial  authority   (The  Com- 


INDUS  TRIA  L    COM  BIN  A  TIONS 


403 


mercial  Year  Book,  1900,  Book  I,  Vol.  V,  p.  564)  the  following 
table  represents  the  growth  of  the  "  industrial  "  (manufactur- 
ing and  commercial)  and  gas  trusts  in  the  United  States  from 
1860  to  1900,  not  including  combinations  in  banking,  shipping, 
railroad  transportation,  etc: 


Decade 

Number  Organizations 

Total  Nominal  Capital 

1860-1869 

.    1870-1879 

1880-1889 

1890-1899 

2 

4 

18 

157 

$13,000,000 

135,000,000 

288,000,000 

3,150,000,000 

Total,  40  years 

181 

$3,586,000,000 

The  movement  began  on  a  large  scale  in  1898,  and  ran  at 
fever  heat  through  the  tw^o  following  years:  in  the  single  year 
1899  new  comljinations  were  reported  with  a  nominal  capital 
of  $3,512,000,000,  of  which,  however,  more  than  three  quarters 
represented  the  original  capital  of  the  reorganized  companies; 
in  the  following  year  the  United  States  Steel  Corporation  was 
organized  with  a  capital  of  $1,100,000,000  in  addition  to  a 
])onded  indebtedness  of  $304,000,000.  Promoters  and  specu- 
lators took  advantage  of  the  eagerness  of  the  investing  public 
to  purchase  industrial  securities,  and  floated  many  questionable 
enterprises.  Over  four  billion  dollars'  worth  of  securities  was 
marketed  by  the  new  industrial  trusts  before  the  movement 
spent  itself.  By  1903,  however,  it  came  to  an  end;  the  col- 
lapse of  the  ship-building  trust  revealed  some  of  the  evils  of 
fraudulent  trust  financiering,  and  the  decline  of  the  stocks  of 
most  of  the  new  companies  disillusionized  the  investor  and 
Ijrought  about  a  general  reaction  in  public  sentiment.  Many 
exaggerated  estimates  have  been  made  of  the  extent  of  this 
movement,  but  the  most  trustworthy  count  at  the  time  it  was 
made  was  probably  that  of  the  census  of  1900,  from  which 
pools  and  simple  expansion  of  existing  businesses  have  been 
excluded.    One  hundred  and  eighty-five  industrial  combinations 


404      ECONOMIC   HISTORY    OF    THE    UNITED   STATES 

were  reported,  comprising  less  than  one-half  of  1  per  cent, 
of  the  establishments  in  the  country,  but  owning  15  per  cent, 
of  the  capital,  emplo3'ing  8  per  cent,  of  the  employees,  and 
turning  out  14  per  cent,  of  the  manufactured  products  in  the 
United  States.  The  greatest  combinations  had  taken  place 
in  the  iron  and  steel  industry,  which  alone  produced  nearly 
one  third  of  the  gross  value  of  the  products  of  all  industrial 
combinations.  The  largest  combination  of  all,  however,  —  the 
United  States  Steel  Corporation  —  was  not  included  in  this 
report.  The  following  table  gives  a  summary  of  the  census 
statistics  of  trusts  in  1900,  arranged  by  industries: 

Industrial  Combinations 


No.  of 

No.  of 

Industry 

Comb. 

Plants 

Iron  and 

steel   

40 

447 

Food  and  kin- 

dred      pro- 

ducts  

22 

282 

Chemicals 

and      allied 

products   .  . 

15 

250 

Jletals  and 

metal     pro- 

ducts other 

than       iron 

and   steel   . 

11 

89 

Liquors    and 

beverages   . 

28 

219 

Vehicles     for 

land   trans- 

portation .  . 

6 

65 

Tobacco  

4 

41 

Textiles 

8 

72 

Leather    and 

its   finished 

products  .  . 

5 

100 

Paper  and 

printing  .  . . 

7 

116 

Clay,        glass 

and      stone 

products  . . 

15 

180 

Lumber    and 

its     manu- 

factures .  .  . 

8 

61 

Miscellane- 

ous   indus- 

tries   

16 

118 

Total 

185 

2040 

Capital 

Average 
No.  of 
Wage- 
earners 

$341,779,954 

145,609 

247,944,675 

33,165 

176,502,835 

28,401 

118,519,401 

20,522 

118,489,158 

7,624 

85,965,683 
16,191,818 
92,468,606 

34,422 
17.661 
37,723 

62,734,011 

9,898 

59,271,691 

16,706 

46,878,928 

20,294 

24,470,281 

10,778 

45,408,869 

17,243 

$1,436,625,910 

400,046 

Cost  of 
Materials 


$325,630,784 
243,315,234 
142,572,256 


131,020,638 
19,117,973 


56,600,518 
23,809,804 
41,919,311 


35,463,655 
24,554,364 

6,474,816 

11,028,757 

28,158,224 


$1,089,666,334 


Value  of 
Products 


$508,626,482 
285,941,066 
184,914,344 

180,154,703 
93,432,274 


85,985,533 
74,063.029 

71,888,202 


45,684,829 
44,418,417 

23,258,182 

20,378,815 

48,605,073 


$1,667,350,949 


INDUSTRIAL    COMBINATIONS  405 

330.  Extent  of  the  trust  movement.  —  Even  since  the  pub- 
lication of  this  conservative  report,  other  combinations  have 
been  effected  which  greatly  change  these  figures.  In  1904  it 
was  estimated  that  318  industrial  trusts  with  a  capital  of 
$7,246,000,000  and  representing  consolidations  of  nearly  5300 
distinct  plants  existed  in  the  United  States;  of  this  capital, 
over  one  third  was  controlled  by  seven  great  organizations. 
While  these  figures  are  far  from  trustworthy  they  at  least 
serve  to  indicate  roughly  the  extent  to  which  combinations  of 
various  sorts  have  entered  into  our  national  industrial  life. 
They  control  more  or  less  successfully  the  production  of  tobacco, 
petroleum,  sugar,  linseed  oil,  iron  and  steel,  copper,  ship-build- 
ing, beef,  starch,  flour,  cottonseed  oil,  candy,  chewing  gum, 
cereals,  ice,  glucose,  crackers,  matches,  whisky,  anthracite 
coal,  fertilizers,  tin  cans,  farming  tools,  locomotives,  writing- 
paper,  school  furniture,  sewer  pipe,  glassware,  rubber  goods, 
buttons,  leather,  electrical  supplies,  etc.,  etc. 

The  transportation  business  was  one  of  the  first  to  be  or- 
ganized in  the  hands  of  a  few  monopolistic  companies,  —  on  a 
national  scale  in  the  case  of  the  steam  railroads,  and  locally  for 
the  street  railways.  Telegraph,  telephone,  express,  gas,  water, 
and  electric  lighting,  and  other  natural  monopolies  have  long 
since  been  brought  under  centralized  control.  It  is  evident, 
therefore,  that  combination  and  organization  of  immense 
industries  under  unified  control  are  facts  of  our  modern  in- 
dustrial life  which  must  be  recognized  and  studied  if  we  are  to 
understand  present  economic  tendencies. 

331.  The  Standard  Oil  Trust.  —  A  brief  sketch  of  the  de- 
velopment of  the  Standard  Oil  Company,  the  oldest  and  still 
the  most  powerful  industrial  trust,  will  bring  out  some  of  these 
points  more  clearly.  For  several  years  after  the  discovery  of 
petroleum  in  1859,  the  business  of  producing  and  refining  it 
was  carried  on  by  private  individuals  under  highly  competitive 
conditions.  In  1865  a  Cleveland  firm,  which  had  steadily 
prospered  as  a  result  of  good  management  and  improved 
methods  of  refining  the  oil,  was  organized  under  the  name  of 


406      ECONOMIC   HISTORY    OF    THE    UNITED    STATES 

the  Standard  Oil  Company,  with  a  capital  of  $100,000.  They 
gradually  extended  their  operations,  acquired  control  of  rival 
refineries,  sometimes  by  unfair  methods,  and  established  agen- 
cies in  other  States.  In  1872,  under  the  name  of  the  South 
Improvement  Company,  they  secured  rebates  from  the  rail- 
ways, not  merely  on  their  own  oil,  but  on  all  shipments  by  their 
competitors.  While  this  conspiracy  was  quickly  discovered 
and  the  South  Improvement  Company,  which  was  immediately 


Oil  Wells 
This  is  a  general  view  of  the  gushers  and  oil  wells  at  Spindle  Top, 
Texas.     Large  discoveries  of  oil   were  made  in  southern  Texas  in 
1901,  and  the  oil  regions  were  soon  covered  with  derricks  and  per- 
forated with  wells. 

disowned  by  the  Standard  Oil,  lost  its  charter,  the  parent  com- 
pany secured  discriminating  rates  in  its  favor  soon  after  and 
has  enjoyed  them  down  to  the  present  time.  On  this  point 
Commissioner  Garfield,  of  the  Bureau  of  Corporations,  in  his 
report  of  May  2,  1906,  on  the  Standard  Oil  Company,  made  the 
following  emphatic  statement:  ''The  Standard  Oil  Company 
has  habitually  received  from  the  railroads,  and  is  now  receiv- 
ing, secret  rates  and  other  unjust  and  illegal  discriminations." 
Improvements  were,   however,   also   made   in   methods  of 


INDUSTRIAL    COMBINATIONS  407 

production,  of  transporting  the  oil  by  means  of  tank  cars  and 
of  pipe  lines,  of  storage  in  huge  tanks  erected  at  convenient 
points,  and  of  refining  the  oTT  aftd  utilizing  the  various  by- 
products. The  company  soon  obtained  a  practical  monopoly 
in  the  business  of  refining  oil,  and  more  recently  has  secured 
possession  of  the  greater  part  of  the  oil-producing  regions. 
By  reason  of  its  great  economies  in  production  it  has  been  able 
to  reduce  the  price  of  oil,  and  at  the  same  time  to  pay  enor- 
mous profits  to  the  stockholders.  In  1882  it  was  organized 
as  a  trust,  but  when  that  form  of  organization  was  declared 
illegal  the  trust  was  dissolved  and  the  business  was  organized 
separately  under  the  corporation  laws  of  each  State.  Ac- 
cordingly, the  Standard  Oil  Company  consists  to-day  of  some 
twenty  different  corporations  in  as  many  different  States,  but 
with  the  same  stockholders  in  all,  the  parent  company  being 
organized  under  the  laws  of  New  Jersey. 

332.  Are  the  trusts  monopolies  ?  —  The  word  monopoly 
covers  so  many  meanings  that  it  is  necessary  before  going 
further  to  distinguish  the  different  kinds  of  monopoly.  They 
may  be  classified  briefly  as  (1)  legal  monopolies,  as  those  granted 
private  individuals  by  the  government  in  a  patent,  or  reserved 
by  the  government  for  itself,  as  the  postal  business;  (2)  natural 
monopolies,  as  anthracite  coal,  street  railways,  gas  plants,  etc.; 
(3)  capitalistic  monopolies,  which  by  virtue  of  their  large  capi- 
tal and  the  concentration  of  production  exercise  considerable 
monopolistic  power.  It  is  to  this  last  group  that  the  name 
'^  trust  "  has  been  popularly  applied.  Some  of  the  combina- 
tions have  secured  undoubted  monopoly  by  their  control  of 
the  patents  in  certain  lines  of  manufacturing;  thus  the  Ameri- 
can Steel  and  Wire  Company  makes  practically  all  of  the  barb 
wire  and  wire  fencing  manufactured  in  the  United  States.  The 
Anthracite  Coal  Combination,  by  virtue  of  its  ownership  of 
almost  the  sole  source  of  supply,  has  a  natural  monopoly,  as 
does  also,  in  a  lesser  degree,  the  Standard  Oil  by  its  control 
of  the  pipe  lines.  But  it  is  also  possible  for  a  company,  by 
reason  of  the  very  size  of  its   capital,  to  maintain   practical 


408      ECONOMIC   HISTORY   OF    THE    UNITED   STATES 

control  of  the  market.  A  modern  sugar  refinery  costs  at  least 
$1,000,000,  while  to  build  and  thoroughly  equip  a  plant  for 
the  manufacture  of  steel,  and  to  carry  on  the  business,  an 
investment  of  from  $20,000,000  to  $30,000,000  is  required. 
The  necessity  of  so  large  an  amount  of  capital  effectually 
prevents  free  competition.  To  have  a  monopoly,  moreover, 
it  is  not  necessary  for  a  company  to  completely  control  the 
industry;  the  production  of  even  50  or  60  per  cent,  of  the 
supply  may  suffice  to  secure  a  virtual  monopoly. 

333.  Advantages  of  combinations.  —  Among  the  causes  and 
advantages  of  combination,  usually  first  cited  by  the  organizers, 
are  the  economies  in  production  and  marketing  thereby  effected. 
Only  the  best  located  and  most  efficiently  equipped  plants  are 
operated;  one  of  the  most  striking  phases  of  modern  American 
industry  is  the  readiness  with  which  obsolete  machinery  is 
consigned  to  the  scrap-heap,  and  nowhere  has  this  character- 
istic baen  better  exemplified  than  in  the  action  of  some  of  the 
most  successful  trusts,  as  the  Standard  Oil,  the  whisky,  the 
steel  trust,  etc.  Economy  in  marketing  is  also  secured  by 
those  trusts  which  have  plants  located  in  various  parts  of 
the  country,  among  which  orders  are  so  distributed  as  to  save 
the  cost  of  distant  transportation;  this  is  well  illustrated  in  the 
case  of  the  salt  trust,  as  well  as  of  those  just  mentioned. 
The  cost  of  advertising,  of  traveling  salesmen,  and  other  items 
which  figure  largely  in  a  strongly  competitive  business,  may 
be  materially  reduced  under  combination.  Another  advantage 
which  has  often  been  claimed,  as  by  the  sugar  and  tobacco  trusts, 
is  the  exchange  of  the  best  ideas  in  the  combining  plants,  and 
the  raising  of  the  efficiency  of  all  to  the  level  of  the  best.  Other 
things  being  equal,  the  combinations  will  probably  be  able  to 
secure  the  best  talent  and  organizing  ability  fortheir  service.  But 
on  the  other  hand,  the  expense  of  supervision  tends  to  grow  more 
than  proportionately  after  a  certain  point  is  reached.  Many  of 
these  economies,  too,  are  shared  equally  by  independent  large- 
scale  producers,  and  it  is  with  these,  rather  than  with  small- 
scale  manufacturers,  that  any  comparison  should  be  made. 


IND  U  ST  RIAL    COM  BIN  A  TIONS 


409 


334.   Evils   of   capitalistic   monopolies.  —  In   so  far   as   the 

industrial  trust  secures  economies  of  production  which  would 
not  otherwise  have  been  effected,  it  is  justified  as  an  efficient 
mode  of  organization.  Savings  in  production  as  a  result  of 
large-scale  methods  are,  however,  not  new,  but  have  charac- 
terized  the    manufacturino-    industries   of   the    United    States 


OxE  OF  THE  Largest  Paper  Machixes  ix  the  World 
The  enormous  rolls  are  of  newspaper,  manufactured  from  wood  pulp. 
The  United  States  uses  annually  nearly  two  million  cords  of  wood  in  the 
manufacture  of  paper,  an  area  half  as  large  as  Rhode  Island  being  stripped 
of  timber  to  supply  the  paper  mills.  Most  of  these  mills  are  located  near 
the  sources  of  the  raw  materials. 


since  the  middle  of  the  century  and  have  contributed  largely 
to  concentration  of  business.  The  peculiar  economies  effected 
by  the  trust  lie  rather  in  the  savings  in  marketing,  and  these 
are  secured  both  in  the  purchase  of  raw  material  and  the  sale 
of  the  finished  products.  But  in  these  ver}^  economies  lurk 
certain    dangers    to    both    producers    and    consumers,    which 


410      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

constitute  the  chief  objections  to  industrial  combinations. 
The  producers  of  raw  materials,  as  cattlemen,  crude  oil  pro- 
ducers, sugar  growers,  and  others  complain  that  the  price  at 
which  they  shall  sell  their  products  is  dictated  to  them  by  the 
trust,  which  is  almost  the  sole  purchaser.  While  the  price 
offered  can  not  be  maintained  permanently  below  the  cost  of 
production,  the  producers  object  to  a  system  which  deprives 
them  of  possible  gains  from  market  fluctuations. 

On  the  other  hand,  the  trusts  have  not  lowered  the  prices 
of  their  products  to  the  public  in  proportion  to  their  increased 
economies,  and  in  some  cases  have  even  raised  them.  The 
chief  purpose  of  combination  has  always  been  to  control  output 
and  prices;  the  successful  trust  can  best  be  tested  by  this  stand- 
ard. The  whisky  trust,  the  plate-glass  company,  the  wire 
nail  pool,  the  cordage  trust,  and  others  advanced  prices  beyond 
the  competitive  point;  many  others,  such  as  the  Standard  Oil, 
the  tin  plate,  sugar,  steel,  salt,  and  paper  trusts  have  utilized 
their  power  to  maintain  prices  at  a  higher  rate  while  the  cost 
of  production  was  falling,  or  to  reduce  them  very  gradually. 
On  this  point  the  very  conservative  report  of  the  Industrial 
Commission  concludes  "  that  in  most  cases  the  combination 
has  exerted  an  appreciable  power  over  prices,  and  in  practically 
all  cases  it  has  increased  the  margin  between  raw  materials 
and  finished  products.  Since  there  is  reason  to  believe  that  the 
cost  of  production  over  a  period  of  years  has  lessened,  the 
conclusion  is  inevitable  that  the  combinations  have  been  able 
to  increase  their  profits." 

335.  Special  favors  to  the  trusts.  —  The  growth  of  the  most 
powerful  trusts  has  been  aided  by  alliances  with  natural  mo- 
nopolies, especially  railroads.  ''  There  can  be  no  doubt,"  says 
the  Industrial  Commission,  ''  that  in  early  times  special  favors 
from  railroads  were  a  prominent  factor,  probably  the  most 
important  factor,  in  building  up  some  of  the  largest  combina- 
tions. The  receipt  of  discriminating  favors  from  railroads  has 
been  conceded  repeatedly  by  representatives  of  the  combina- 
tions themselves."     The  Standard  Oil  Company,  the  live  stock 


INDUSTRIAL    COMBINATIONS  411 

and  dressed  beef  combinations,  the  coffee,  steel,  and  other 
trusts  have  secured  immense  advantages  over  their  rivals 
through  the  discriminations  in  their  favor  by  the  railroads. 
Although  this  evil  was  forbidden  by  the  Interstate  Commerce 
law  of  1887,  and  was  undoubtedly  lessened,  evidence  shows 
that  it  is  still  being  practised  even  at  the  present  time.  In  so 
far  as  the  trusts  owe  their  existence  to  railroad  discriminations, 
their  success  carries  with  it  no  guarantee  of  superior  service  or 
economy;  they  may  have  supplanted  more  efficient  but  less 
favored  firms.  Against  such  an  evil  the  public  has  a  righteous 
grievance  and  should  demand  immediate  relief.  Where,  how- 
ever, the  trust  has  supplanted  its  rival  by  reason  of  greater 
economy  of  production,  the  public  may  pity  but  cannot  afford 
to  maintain  the  less  efficient  producer. 

Some  writers  have  claimed  that  the  protective  tariff  con- 
stitutes a  special  favor  to  the  trusts  and  is  one  of  the  chief 
causes  of  their  growth.  A  more  correct  view  seems  to  be  that 
the  protective  tariff  has  narrowed  the  competitive  field  and 
has  in  so  far  made  the  formation  of  a  national  trust  easier. 
Behind  the  tariff  wall  there  have  grown  up  the  steel,  tin  plate, 
sugar,  leather,  and  other  combinations. 

336.  The  trusts  and  labor.  —  The  organization  of  capital 
on  a  large  scale  and  under  centralized  control  seemed  at  first 
to  constitute  a  menace  to  labor,  but  as  time  passed  it  was 
seen  that  the  apprehended  dangers  were  greatly  exaggerated. 
One  of  the  economies  effected  by  the  industrial  combination 
was  the  reduction  in  the  number  of  laborers;  as  plants  were 
consolidated  some  of  the  expensive  superintendents  and  least 
efficient  laborers  were  discharged.  It  was  found  possible  also 
to  dispense  largely  with  traveling  salesmen,  of  whom  over 
30,000  were  said  to  have  lost  their  positions  in  the  single  year 
1898.  On  the  other  hand,  only  the  most  efficient  workmen 
being  retained,  it  was  possible  to  raise  their  wages  very  gen- 
erally; how  far  this  was  due  to  the  superior  trust  management 
and  how  far  to  the  general  prosperity  which  has  of  recent  years 
prevailed  in  the  country,  it  is  impossible  to  say.     It  is  also 


412       ECONOMIC    HISTORY  OF    THE    UNITED    STATES 

claimed  for  the  trusts  that  by  eliminating  destructive  com- 
petition they  have  steadied  production  and  thereby  made 
employment  more  regular.  But  the  more  complete  the  mo- 
nopoly of  an  industrial  combination  is,  the  more  probable  it  is 
that  it  will  exercise  this  monopoly  power  over  the  labor  market 
as  well  as  in  other  directions.  The  trade  union  leaders,  how- 
ever, have  thus  far  expressed  no  doubts  as  to  the  ability  of 
labor  to  organize  as  perfectly  as  has  capital,  and  to  secure  fair 
collective  bargains  between  the  trusts  and  the  labor  organiza- 
tions. The  success  of  the  United  Mine  Workers'  strike  in  1902 
would  seem  to  show  that  this  faith  is  not  altogether  misplaced. 
337.  Other  effects.  —  Among  the  other  effects  usually 
charged  to  industrial  combinations  may  be  mentioned  the  legis- 
lative corruption  which  has  been  shown  to  be  all  but  universal. 
Bad  as  this  is,  it  cannot  in  fairness  be  charged  up  against  the 
trusts  as  such,  for  it  has  been  practised  equally  by  large 
corporations  and  private  firms.  The  power  and  practice  of 
the  trusts  in  crushing  out  smaller  rivals  by  fixing  destructive 
prices,  recouping  themselves  perhaps  at  another  point  by 
raising  their  prices  there,  is  another  serious  charge.  Where 
a  competitor  is  forced  out  of  business  by  the  superior  efficiency 
of  the  trust  the  economic  saving  justifies  the  process,  but 
where  the  end  is  secured  by  unfair  means  solely  for  the  sake 
of  monopoly,  without  the  compensation  of  lessened  cost  of 
production,  the  methods  can  only  be  condemned.  Another 
result  of  industrial  combination,  it  is  claimed  (and  with  much 
truth),  is _t he,.suppj:ession_j)fjndividual  initiative;,  it  is  impos- 
sible for  the  man  of  small  means,  even  with  large  talents,  to 
engage  in  business  for  himself;  he  must  occupy  a  subordinate 
position,  his  individuality  is  dwarfed;  and  the  country  loses  by 
the  checking  of  his  development.  Without  attempting  to 
argue  this  point  it  may  be  noted  that  there  are  still  large  fields 
of  enterprise  that  lie  entirely  outside  of  monopolistic  control. 
Large-scale  production  is  best  adapted  to  articles  that  can  be 
turned  out  in  large  quantities  according  to  uniform  patterns 
and  standards;  individual  initiative  is  still  free  in  those  lines 


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414      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

of  production  that  call  for  artistic  ability  or  appeal  to  indi- 
vidual tastes,  or  which,  like  agriculture,  are  dependent  upon 
variable  conditions. 

338.  Evils  of  trust  organization  and  management.  —  Thus 
far  the  evils  discussed  have  been  those  resulting  from  the 
monopoly  power  of  the  trusts.  These  have  attracted  the 
most  attention  and  against  them  the  legislative  remedies  have 
usually  V)een  directed.  More  serious,  however,  are  those  evils 
connected  with  bad  methods  of  organization  and  loose  adminis- 
tration. Hand  in  hand  with  the  growth  of  industrial  com- 
binations has  gone  a  relaxation  of  the  incorporation  laws  of 
a  few  States.  The  careful  provisions  in  the  laws  of  some 
States  regarding  over-capitalization,  stockholders'  liability,  the 
character  of  the  business,  responsibility  of  directors,  and 
similar  points,  have  been  set  at  nought  by  the  lax  policy  of 
a  few  other  States,  notably  New  Jersey,  Delaware,  and  West 
Virginia.  Over-capitalization  —  not  merely  beyond  the  actual 
value  of  the  plants,  but  beyond  the  earning  power  —  has 
attended  practically  every  reorganization  of  competing  firms 
into  an  industrial  combination.  This  has  been  the  inevitable 
result  of  the  speculative  methods  practised  by  the  trust  pro- 
moters and  underwriters;  it  could  be  successful  only  to  the 
extent  to  which  it  deceived  investors.  The  attempt  to  sell 
large  amounts  of  watered  stock  on  the  stock  market  has 
also  led  to  faulty  financial  administration  of  the  business,  to 
the  declaration  of  unearned  dividends,  the  increase  in  the 
floating  debt,  the  neglect  of  the  surplus  reserve,  and  in  some 
cases,  as  the  United  States  Ship-building  Company,  to  actual 
fraud.  Owing  to  the  fact  that  a  corporation  chartered  in  one 
State  is  at  liberty  to  do  business  in  all  the  other  States  of  the 
Union,  evils  of  this  character  are  peculiarly  elusive  and  difficult 
to  control. 

339.  Trust  legislation.  —  Under  the  common  law  monopoly 
was  a  crime,  punishable  by  fine  and  imprisonment,  and  agree- 
ments in  restraint  of  trade,  carried  so  far  as  to  be  unreasonable, 
were  held  to  be  illegal  and  unenforceable.     In  1887  Congress 


INDUSTRIAL    COMBINATIONS  415 

passed  the  Interstate  Commerce  Act,  prohibiting  pools  among 
railways,  and  three  years  later  the  Sherman  Anti-Trust  Law, 
which  provided  that  "every  contract,  combination  in  the 
form  of  a  trust  or  otherwise,  or  conspiracy  in  restraint  of  trade 
or  commerce  among  the  several  States,  or  with  foreign  nations, 
is  hereby  declared  illegal."  At  the  same  time  there  began  the 
enactment  of  anti-trust  legislation  by  the  States;  thirty-two 
States  and  two  Territories  in  all  passed  such  laws,  and  in  seven- 
teen States  anti-trust  provisions  w'ere  inserted  in  the  State 
constitutions.  These  enactments  were  very  severe,  but  before 
they  could  be  fairly  tested  in  the  courts,  they  were  deprived 
of  all  power  to  control  the  growing  trusts  by  the  lax  policy  of 
the  three  '^  charter-granting  "  States,  New  Jersey,  Delaware, 
and  West  Virginia,  which  not  only  failed  to  pass  any  anti-trust 
legislation,  but  greatly  relaxed  their  existing  statutes.  Ninety- 
five  per  cent,  of  the  trusts  were  accordingly  incorporated  in 
these  States,  and  as  a  corporation  can  l^e  deprived  of  its  charter 
only  for  violation  of  the  laws  of  the  State  in  which  it  is  incor- 
porated, the  other  States  were  helpless.  Defects  in  the  Federal 
acts  were  soon  discovered  also,  and  though  these  were  partially 
remedied  by  the  Elkins  Law  of  1903,  which  facilitated  prose- 
cutions under  the  Interstate  Commerce  Act,  and  by  the  crea- 
tion of  the  Federal  Bureau  of  Corporations  with  power  to  make 
"  diligent  investigation  into  the  organization,  conduct,  and 
management  "  of  corporations  engaged  in  interstate  commerce 
(railroads  excepted),  the  statutory  control  of  trusts  remains 
very  slight. 

340.  Trust  regulation.  —  In  view  of  the  failure  of  existing 
methods  and  statutes  to  remedy  the  evils  of  the  trusts,  various 
suggestions  have  been  made  for  further  regulation.  "  The 
evils  of  combination,  remedied  by  regulative  legislation,  come 
chiefly  from  two  sources:  (1)  the  more  or  less  complete  exer- 
cise of  the  power  of  monopoly;  (2)  deception  of  the  public 
through  secrecy  or  false  information."  ^  To  meet  the  first 
difficulty  numerous  measures  have  been  advocated,  such  as  a 
1  Kept,  of  Ind.  Com.  XIX,  645. 


416      ECONOMIC   HISTORY    OF    THE    UNITED   STATES 

constitutional  amendment  which  should  give  complete  control 
of  all  interstate  commerce  to  the  Federal  government;  but  such  a 
measure,  which  would  lead  to  ver}^  great  centralization  of  power 
in  the  hands  of  Congress,  is  unlikely.  The  extension  of  federal 
control  under  existing  statutes  has  been  urged,  by  forbidding 
the  use  of  the  mails  to  the  trusts,  by  government  ownership 
and  management  of  monopolized  products,  by  forbidding  the 
unfair  underselling  of  rivals  in  competitive  markets,  by  the 
removal  of  special  favors  which  have  caused  the  growth  of  mo- 
nopolies, such  as  railway  discriminations  and  protective  duties, 
by  Federal  taxation  of  interstate  commerce,  and  by  fixing 
maximum  prices.  Against  the  second  class  of  evils  legislation 
requiring  publicity  and  ensuring  the  responsibility  of  officials 
has  been  especially  urged,  and  commends  itself  by  its  reason- 
ableness. The  first  step  tow^ard  such  control  has  been  taken 
by  the  creation  of  the  Bureau  of  Corporations  in  the  Depart- 
ment of  Commerce  and  Labor,  the  first  result  of  whose  labors 
was  the  report  on  the  beef  trust.  The  application  of  other 
remedies,  social  rather  than  legislative  in  character,  has  also 
been  suggested,  such  as  the  boycotting  of  trust-made  goods, 
the  social  ostracism  of  trust  magnates,  etc. 

SUGGESTIVE  TOPICS   AND   QUESTIONS.     CHAPTER   XXVH 

1.  Does  the  tendency  towards  combination  indicate  an  irresistible 
movement  to  socialism,  or  to  government  management  of  all  production? 
[Chicago  Conference  on  Trusts,  569;  Xettleton,  Trusts  or  Competition, 
267-273.] 

2.  Can  the  large  establishment  always  undersell  the  small  one? 

3.  Are  you  personally  familiar  with  any  agreement  to  control  prices? 
What  was  its  effect? 

4.  "Would  it  be  a  good  thing  for  society  if  a  trust  made  great  econ- 
omies in  production,  crowded  out  its  smaller  competitors,  and  maintained 
prices  just  where  they  were  before,  dividing  among  its  shareholders  the 
amounts  saved?" — [Fetter.] 

5.  Do  you  know  of  any  instances  where  a  trust  has  unfairly  crushed 
out  competition?  [Montague,  84;  Jenks,  155;  von  Halle,  22;  Lloyd, 
Wealth  against  Commonwealth;  Rep.  Ind.  Com.,  I.  20  (and  references  to 
testimony),  XIII,  xxiii  (and  testimony).] 

6.  Relate  the  history  of  some  of  the  most  important  industrial  corr- 


INDUSTRIAL    COMBINATIONS  417 

binations,  as  the  standard  oil,  steel,  ship-building,  international  marine, 
copper,  etc.  [Rep.  Ind.  Com.,  XIII,  xli-cxxii,  Moody,  Truth  about  Trusts; 
Ripley,  Trusts,  Pools,  and  Corporations;  Tarbell,  Hist,  of  Standard  Oil 
Company.] 

7.  In  his  testimony  before  the  Industrial  Commissions,  Mr.  Have- 
meyer,  President  of  the  American  Sugar  Refining  Company,  said  that 
"the  mother  of  all  trusts  is  the  customs  tariff  law."  Is  this  true?  [Rep. 
Ind.  Com.,  XIII,  cxl-clvi,  I,  23  (and  references  to  testimony);  Chicago 
Conference  on  Trusts,  171;  Jenks,  44-48;  Collier,  The  Trusts,  242-259; 
Bolen,  Plain  Facts,  112,  121.] 

8.  Do  you  know  of  any  trusts  built  up  on  legal  monopoly  (patents)? 
Would  it  be  desirable  to  change  the  patent  laws?  [Jenks,  Trust  Problem, 
220;  Ely,  Trusts  and  Monopoly,  267.] 

9.  Should  you  prefer  to  engage  in  business  for  yourself  or  accept  a 
position  in  a  trust?  In  which  do  you  think  your  chances  of  success  would 
be  greater?  [Chicago  Conference  on  Trusts,  57;  Montague,  Trusts  of  To- 
day, 90;  Rep.  Ind.  Com.,  I,  31  (and  references  to  testimony).] 

10.  Do  you  know  any  case  where  a  monopoly  has  permanently  re- 
duced prices?  Why?  [Rep.  Ind.  Com.,  XIII,  19  (and  references  to  testi- 
mony); Marshall,  Principles  of  Economics,  130,  note  1.] 

11.  Are  there  any  other  effects  not  mentioned  in  the  text  which  have 
resulted  from  trusts?  [Jenks,  Trust  Problem,  chap.  10;  Rep.  Ind.  Com., 
1,  33  (and  references  to  testimony),  XIII,  32.] 

12.  Describe  the  methods  of  promoting  and  financing  a  modern  trust. 
[Meade,  Trust  Finance,  chaps.  4-8;  Jenks,  Trust  Problem,  chap.  5;  Collier, 
chap.  9;  Rep.  Ind.  Com.,  XIII,  7  (and  references  to  testimony).] 

13.  What  is  stock  watering  and  why  is  it  resorted  to?  [Hadley, 
Railroad  Transportation,  54,  note;  Jenks,  chap.  6;  Meade,  chap.  16, 
especially  p.  303;  Collier,  chap.  11;  Rep.  Ind.  Com.,  I,  12-16  (and  refer- 
ences to  testimony).] 

14.  Could  harmonious  action  by  all  the  States  be  secured  to  control 
trusts?  [Coman,  330;  Jenks,  chap.  13;  Montague,  Trusts  of  To-day, 
162-174.] 

15.  Why  has  Congress  no  power  to  control  business  wholly  within  a 
State? 

16.  What  is  interstate  commerce?  [Interstate  Commerce  Act,  sect. 
1;  also  in  Snyder,  The  Interstate  Commerce  Act,  32.] 

17.  Would  the  advantages  of  large-scale  production,  together  with 
the  existence  of  combination  and  of  monopoly,  warrant  the  government 
ownership  and  management  of  a  business? 

18.  Do  you  think  the  government  has  a  right  to  say  how  private 
individuals  shall  carrj^  on  their  business,  as,  for  example,  in  a  factory  or 
in  the  meat-slaughtering  industry? 

28 


418      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

SELECTED   REFERENCES.     CHAPTER   XXVII 

**Jenks:  The  Trust  Problem. 

** Industrial  Commission  Report,  vols.  1,  2,  13,  19. 

*Meade:  Trust  Finance. 

*.Montague:  Trusts  of  To-day. 

**Ripley  (Ed.h  Trusts,  Pools,  and  Corporations. 

* Trusts  and  Combinations,  Report  of  the  Chicago  Conference  on. 

Baker:  Monopoly  and  the  People,  7-41,  267-284,  347-362. 
Collier:  The  Trusts. 

Ely:  Monopolies  and  Trusts,  chaps.  .5,  6. 
Jeans:  Tru.sts,  Pools,  and  Corners,  chaps.  7-9. 
Moody:  The  Truth  about  Trusts. 

von   Halle:  Trusts,   or  Industrial  Combinations  in   the  United   States, 
chaps.  2-4. 


CHAPTER  XXVIII 
THE  EMERGENCE  OF  THE   LABOR  PROBLEM    (1860-1880) 

341.   The  effect  of  the  Civil  War  on  the  labor  problem.  —  In 

one  aspect  the  Civil  War  was  the  final  act  in  a  labor  struggle 
which  had  dominated  the  Kistor}^  of  the  United  States  for  the 
previous  half-century  —  that*  of  free  versus  slave  labor.  With  " 
the  emancipation  of  tHe  slaves  the  labor  problem  reaches  a  new 
phase  and  the  emphasis  frorfi  this  time  on  is  placed  upon  the 
betterment  of  the  condition  of,  the  industrial  classes.  The 
same  forces  which  had  secured  the  freedom  of  the  slave  were 
now  directed  largely  to  the  problem  of  ameliorating  the  con- 
dition of  the  wage-workers.  _Ttie  derangement  of  wages  by 
the  excessive  issue  of  legal-tender  paper  money,  the  growth  of 
manufactures,  the  introduction  of  machinery,  and  the  increase 
of  foreign  immigration  were  all  combining  to  produce  a  new 
set  of  conditions  and  to  call  for  corresponding  adjustments. 
After  1860,  accordingly,  the  labor  problem  assumes  a  new 
prominence. 

During  the  war  thousands  of  men  were  drawn  from  produc- 
tive industry;  upon  the  conclusion  of  peace,  1,000,000  men 
were  enrolled  in  the  Union  army.  The  ease  with  which  this 
labor  force  was  reabsorbed  into  the  industrial  organism,  with 
little  of  the  suffering  that  marked  the  disband ment  of  the 
Napoleonic  armies,  has  always  excited  the  wonder  of  historians. 
Chiefly  responsible  for  this  was  the  large  amount  of  free  land  in 
the  West,  to  which  there  was  an  unprecedented  rush.  In  the 
South  the  problem  was  solved,  temporarily  at  least,  by  the 
world's  need  of  cotton.  The  change  from  war  to  peace  was  not 
made,  however,  without  some  difficulty  and  discontent,  which 
found  partial  expression  in  labor  agitation  and  conflicts. 

419 


/ 


420      ECONOMIC   HISTORY    OF    THE    UNITED   STATES 

342.  The  growth  of  a  wage-earning  class.  —  In  1860  the 
great  mass  of  the  people  were  still  engaged  in  agricultural 
pursuits;  as  late  as  1880  over  44  per  cent,  of  that  part  of  the 
population  engaged  hi  gainful  pursuits  were  employed  in  farm- 
ing. Nevertheless,  there  was  a  growing  class  of  wage  workers 
enrolled  in  manufacturing  pursuits,  comprising^^2L.8^r  cent,  of 
the  total  population  in  1880,  of  whom  it  was  estimated  that 
at  least  four  fifths  were  employed  in  factories.  The  distribu- 
tion of  the  manufacturing  population  was,  however,  very  un- 
even: of  the  957,059  persons  recorded  by  the  census  of  1850 
as  employed  in  the  manufacturing  industries,  three  quarters 
w^ere  in  the  New  England  States  and  New  York,  Pennsylvania, 
and  New  Jersey.  In  1880  the  total  number  was  3,837,112, 
and  the  proportion  of  those  engaged  in  manufactures  ran  as 
high  as  51  per  cent,  of  the  working  population  in  industrial 
States  like  Massachusetts. 

The  development  of  manufactures  and  the  accompanying 
growth  of  cities  tended  to  concentrate  men  in  larger  masses  for 
social  as  well  as  for  industrial  activities.  As  the  capacity  of 
factories  increased  larger  numbers  of  operatives  were  brought 
together  under  one  roof  and  management.  At  the  same  time 
the  growing  displacement  of  hand  labor  by  machinery  and  the 
increased  size  of  the  business  unit  made  the  worker  more 
dependent  upon  the  owner  of  capital  for  his  employment,  and 
introduced  new  lines  of  social  cleavage.  In  short,  the  intro- 
duction of  the  factory  system  had  brought  with  it  a  set  of 
conditions  which  are  usually  summed  up  under  the  title  of  the 
labor  problem.  Among  these  were  the  employment  of  women 
and  children,  the  growth  of  labor  organizations,  the  spread  of 
conflicts  between  labor  and  capital,  and  the  necessity  of  labor 
legislation  to  regulate  these  and  other  evils. 

343.  Population  and  immigration.  —  The  industrial  prob- 
lems of  this  period  were  greatly  influenced  by  the  growth  of 
the  population,  and  by  the  rapidity  and  character  of  the 
immigration.  After  1860,  owing  to  the  Civil  War,  the  rate  of 
increase  in  the  population  fell  off  considerably  and  never  again 


THE    EMERGENCE    OF    THE    LABOR    PROBLEM        421 

attained  the  ante-bellum  growth;  the  total  number  rose  from 
31,443,321  in  that  year  to  50,155,783  in  1880.  Immigra- 
tion also  declined  during  the  war,  but  soon  after  its  close  was 
renewed  with  increased  vigor.  In  1864  an  act  had  been 
passed  by  Congress  ''  to  encourage  immigration,"  according  to 
which  laborers  might  be  engaged  under  contract  in  foreign 
countries,  their  wages  being  pledged  in  advance  to  pay  for 
their  transportation.  This  law  w^as  repealed  after  four  years, 
but  the  business  prosperity  of  the  period  1867-72  proved  even 
more  potent  in  attracting  laborers  to  this  country.  The  need 
of  laborers  was  great  in  every  line  of  industry;  the  western 
States  were  establishing  immigration  bureaus  to  aid  foreigners 
to  come  and  settle  with  them;  agents  of  foreign  steamship  lines 
began  to  compete  more  vigorously  for  this  developing  traffic, 
rates  were  cheapened,  and  an  immense  stimulus  was  given  to 
the  immigration  movement.  By  1873,  the  number  of  aliens 
coming  to  our  shores  in  a  single  year  had  reached  460,000. 
The  flow  w^as  temporarily  checked  by  the  crisis  of  that  year 
and  the  resulting  depression,  but  in  1879  reached  the  enor- 
mous number  of  789,000,  a  figure  not  equaled  again  for  twenty 
years  thereafter.  The  two  decades,  1861-80,  saw  an  addition 
of  5,127,015  aliens  to  our  population. 

344.  Industrial  effects  of  immigration.  —  Owing  to  the  great 
industrial  expansion  of  the  country  at  this  time  this  large 
addition  to  the  labor  force  —  for  the  majority  of  the  immi- 
grants were  in  the  most  productive  ages  —  was  successfully 
absorbed.  The  settlement  of  the  West,  which,  however,  was 
effected  chiefly  by  native  stock,  the  building  of  railroads,  the 
development  of  the  iron  and  steel  industries,  all  called  for 
large  supplies  of  skilled  and  unskilled  labor.  Had  it  not  been 
for  the  great  addition  to  our  population  by  immigration,  the 
industrial  expansion  of  this  period  could  not  have  proceeded 
as  rapidly  as  it  did,  for  the  opening  up  of  the  West  drew  off 
thousands  of  native  Americans  and  left  a  gap  in  the  labor 
supply  which  must  have  checked  the  growing  manufactures 
had  it  not  been  filled  by  the  immigrants.     The  improvements  in 


422       ECONOMIC    HISTORY    OF    THE    UNITED    STATES 


the  textile,  boot  and  shoe,  and  other  industries,  and  the  intro- 
duction of  automatic  machinery,  made  it  possible  to  draft 
relatively  unskilled  labor  into  the  factories.  The  following 
table  shows  the  extent  to  which  foreigners  concentrated  in  the 
manufacturing  industries. 

Persons  Engaged  in  Different  Occupations,  1880. 


Occupations 

Per  cent,  of  persons 
engaged  who   were 
natives  of  the  U.  S. 

Per  cent,  of  persons 

engaged   who  were 

natives  of  all  foreign 

countries 

All  occupations 

Agriculture 

79.9 
89.4 

75.5 

74.7 

68.0 

20.1 
10.6 

Professional  and  person- 
al service  

Trade      and      transpor- 
tation   

Manufacturing,          me- 
chanical,   and     min- 
ing  

24.5 
25.3 

32.0 

Up  to  this  time  almost  nine  tenths  of  the  immigrants  were 
from  Germany,  Ireland,  Great  Britain,  Canada,  Norway, 
Sweden,  and  Denmark,  and  were  vigorous,  thrifty,  quick  to 
learn,  and  easily  assimilated.  On  the  whole,  however,  they 
were  mostly  unskilled  laborers  and  took  the  lower  places  in 
the  industrial  organism,  while  the  native  workers  moved  up 
into  higher  ones.  The  United  States  presented  the  remarkable 
spectacle  at  this  time  of  a  nation  develop^mg  her  agricultural 
and  her  mechanical  industries  with  nearly  equal  rapidity,  and 
forging  to  the  front  rank  in  both. 

345.   Early  employment   of  women  and   children.  —  While 

women  and  children  have  always  assisted  in  the  work  of  the 

7family,  it  was  not  until  the  development  of  the  factory  system 

that   they  became  a  factor  in  the  manufacturing  industries. 

During  colonial  days  the  household  manufactures  were  carried 


THE    EMERGENCE    OF    THE    LABOR    PROBLEM        423 

on  largely  by  the  women  as  a  part  of  their  general  domestic 
duties;  from  the  days  of  Penelope,  the  faithful  wife  of  Ulysses, 
spinning  and  weaving  and  making  up  of  garments  had  been 
the  peculiar  task  of  the  housewife.  With  the  removal  of  the 
textile  industries  into  the  factories  many  women  naturally 
followed  them  and  became  independent  workers  outside  of  the 
home;  but  for  a  long  time  the  employment  of  women  was  limited 
to  this  and  a  few  similar  industries.  Miss  Harriet  Martineau, 
who  visited  America  in  1840,  stated  that  she  found  only  seven 
occupations  open  to  women:  teaching,  needle-work,  keeping 
boarders,  work  in  the^ot ton-mills,  type-settjng^ book-binding, 
and  domestic  service.  By  1850,  when  statistics  were  gathered 
for  the  first  time,  it  was  found  that  the  225,298  women  em- 
ployed in  manufacturing  establishments  constituted  23.3  per 
cent,  of  all  employees  thus  engaged.  In  several  industries 
where  special  rapidity  or  lightness  of  touch  were  required  the 
women  outnumbered  the  men,  as  in  the  manufacture  of  cotton- 
goods,  hosiery,  hats  and  caps,  gloves,  rubber  goods,  millinery, 
umbrellas,  etc.  In  1860  the  proportion  of  women  employees 
was  about  21.3  per  cent.,  or  one  woman  to  every  3.7  men. 

346.  Effect  of  the  factory  system  on  the  employment  of 
women  and  children.  —  The  year  1850  witnessed  the  largest 
proportion  of  women  workers  in  the  manufacturing  industries, 
although  the  next  thirty  years  saw  a  great  increase  in  the 
absolute  number  employed.  In  1880  there  Avere  631,034 
women  engaged  in  manufactures,  or  16.7  per  cent,  of  the  total 
employees.  This  proportional  decline  was  probably  caused 
b}'  the  development  of  industries  that  called  for  heavy  manual 
labor  and  ph3^sical  strength,  such  as  the  iron  and  steel  indus- 
tries which  experienced  their  greatest  growth  during  this  period. 
On  the  other  hand,  a  somewhat  larger  proportion  of  women 
had  gone  into  other  occupations,  such  as  domestic  and  personal 
service.  Of  the  2,647,157  women  engaged  in  gainful  occupa- 
tions in  1880,  almost  half  or  44.6  per  cent,  were  employed  in 
this  way,  while  23.8  per  cent,  were  in  manufacturing  and  22.5 
per  cent,  in  agricultural  pursuits. 


/ 


424      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

Prior  to  1870  no  statistics  were  gathered  in  the  United 
States  of  the  number  of  children  engaged  in  gainful  occupations; 
the  census  of  that  3'ear  showed  that  739,164  children  between 
ten  and  fifteen  years  of  age  were  thus  employed,  of  whom 
114,628  were  in  manufacturing  establishments.  During  the 
next  decade  the  number  increased  58.7  per  cent.,  the  census  of 
1880  showing  a  total  of  1,118,356  children  in  all  occupations. 
The  disclosure  of  such  an  undesirable  tendency  called  forth 
restrictive  legislation  in  most  of  the  States  and  the  number 
declined  thereafter  both  absolutely  and  relatively. 

347.  Labor  legislation.  —  Prior  to  18S0  there  was  very 
little  labor  legislation  in  the  United  States.  As  Dr.:__Cunning- 
ham  remarks,  so  long  as  the  possibility  of  settling  on  the  public 
lands  existed,  the  necessity  of  taking  active  steps  to  protect 
the  interests  of  labor  had  never  been  recognized.  "  The 
government  has  been  inclined  to  give  facilities  for  th^ accumu- 
lation and  profitable  employment  of  capital,  as  the  best  expe- 
dient for  promoting  the  development  of  industrial  employment 
and  the  good  of  the  community."  While  some  attempts  were 
made  to  protect  the  interests  of  labor,  the  legislation  previous 
to  the  Civil  War  was  practically  confined  to  the  subjects  of 
ini{)risonment  for  debt,  mechanics'  liens,  the  education  of 
children  employed  in  factories,  and  similar  matters.  In  1866 
MassachusettsHook  the  lead  in  the  direction  of  greater  legis- 
lative protection  to  the  working  classes  by  the  passage  of  an 
eight-hour  law  for  children  under  fourteen  years  of  age,  though 
this  was  unfortunately  changed  to  ten  hours  the  following  year. 
A  little  later  (1869)  an  act  was  passed  providing  for  the  estab- 
lishment of  the  first  bureau  of  statistics  of  labor.  Other  laws 
followed,  fixing  the  hours  of  labor  for  women  and  for  chil- 
dren under  eighteen  years  of  age  at  sixty  per  week,  imd  provid- 
ing for  factory  inspection  and  the  safe-guarding  of  dangerous 
machinery.  Similar  legislation  was  enacted  in  other  States, 
directed  for  the  most  part  to  protecting  the  interests  of  the 
weaker  members  of  the  industrial  body;  of  legislation  in  favor 
of  adult   male  workers  there  was  as  yet   practically  no  sign. 

1  @hio  had  passed  a  temporary  ten-hour  law  for  women  and  children 
\mdcr  eighteen  years  as  early  as  1852. 


THE    EMERGENCE   OF    THE    LABOR    PROBLEM        425 

The  redress  of  their  grievances  was  left  to  them  to  secure  by 
their  own  efforts.  In  this  fact  lies  the  key-note  of  the  history 
of  labor  during  this  period,  and  one  of  the  causes  for  the  or- 
ganization of  labor. 

348.  The  rise  of  trade  unions.  —  In  the  labor  organizations 
in  the  United  States  two  distinct  types  of  trade  unions  may  be 
noted  —  the  local  and  the  national  (or  international)  unions. 
The  former,  which  comprises  only  members  who  live  and  work 
in  the  same  locality,  forms  the  basis  of  all  labor  organizations, 
and  dates  back  to  the  beginning  of  the  century.  It  was  not 
until  1850  that  the  first  national  union  —  that  of  the  printers 
—  was  formed;  after  this  the  movement  spread  rapidly,  and  by 
1860  twenty-six  trades  were  stated  to  have  had  national 
organizations. 

The  Civil  War  diverted  m.en's  energies  temporarily  from 
labor  struggles,  but  upon  its  cessation  various  problems  pre- 
sented themselves  for  solution.  The  issue  of  government 
paper  money,  which  had  greatly  depreciated,  called  for  a  read- 
justment of  the  wage  contract,  while  the  absorption  into  the 
ranks  of  peaceful  industry  of  the  disbanded  soldiers  was  not 
carried  through  without  difficulty.  During  the  later  years  of 
the  war  several  of  the  strongest  national  unions  were  formed: 
the  locomotive  engineers  organized  in  1863  and  in  the  follow- 
ing decade  and  a  half  their  example  was  followed  by  the  cigar- 
makers,  bricklayers,  railroad  conductors,  iron  and  steel  workers, 
and  granite  cutters.  This  period  witnessed  a  considerable 
advance  in  the  character  and  strength  of  the  unions,  as  well  as 
in  the  public  appreciation  of  their  aims.  By  1869  they  were 
sufficiently  powerful  to  secure  the  passage  of  an  eight-hour  law 
by  Congress  for  all  Federal  employees,  although  it  remained 
for  many  years  practically  a  dead  letter. 

349.  The  Knights  of  Labor.  —  The  final  step  in  the  organiza- 
tion of  labor,  that  of  uniting  all  union  members  in  the  United 
States  in  one  great  association,  was  also  taken  during  this 
period.  Up  to  this  time  the  unions  had  been  composed  of 
men  in  the  same  trade  or  occupation,  but  now  the  effort  was 


426       ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

made  to  bring  all  men  of  any  trade  whatsoever  into  the  same 
organization.  The  first  attempt  was  made  in  1866  by  the 
^National  Labor  Union,  which  had  only  a  brief  existence,  being 
y  completely  wrecked  in  1872  on  the  rock  of  politics.  More 
successful  was  the  organization  known  later  as  the  Knights  of 
Labor.  Organized  in  1869  as  a  secret  society  by  Uriah  8. 
Stevens,  a  Philadelphia  garment  cutter,  it  grew  at  first  but 
slowly.  The  mystery  which  surrounded  it,  even  the  name  be- 
ing kept  a  secret, exposed  it  to  attacks  and  misrepresentation,  so 
that  in  1881  the  element  of  secrecy  was  abolished.  The  objects 
declared  in  the  preamble  were  ''  to  bring  within  the  folds  of 
organization  every  department  of  productive  industry,  making 
knowledge  a  standpoint  (sic)  for  action,  and  industrial  and 
moral  worth,  not  wealth,  the  true  standard  of  national  great- 
ness." They  wished  "  to  secure  to  the  workers  the  full  enjoy- 
ment of  the  wealth  they  create,  sufficient  leisure  in  which  to 
develop  their  intellectual,  moral,  and  social  faculties,  all  of  the 
benefits,  recreation,  and  pleasures  of  association."  To  secure 
these  they  demanded,  among  other  things,  the  referendum, 
the  establishment  of  bureaus  of  labor  statistics,  cooperation, 
reserving  of  public  lands  for  actual  settlers,  the  abrogation  of 
unequal  laws,  a  weekly  pay-day,  mechanics'  lien  laws,  al)oli- 
tion  of  the  contract  system  of  labor  on  public  works,  substitu- 
tion of  arbitration  for  strikes,  prohibition  of  the  employment 
of  children  under  fourteen  years  of  age,  the  eight-hour  day, 
etc.  The  real  growth  of  the  order  dates  from  about  1881,  so 
that  the  subsequent  history  can  be  told  best  in  the  next  chap- 
ter. Its  platform  is  of  interest  here,  however,  as  showing  the 
aims  of  la])or  unions  at  this  time. 

350.  Industrial  disturbances.  —  While  trade  unions  in  the 
United  States  have  never  l^een  formed  purely,  or  even  pri- 
marily, as  strike  organizations,  this  method  of  enforcing  their 
demands  was  soon  resorted  to  as  they  became  conscious  of 
their  strength.  Yet  as  late  as  1874  an  American  writer  could 
say:  ''  Strikes  in  this  country  have  not  been  very  serious  nor 
long   protracted."     Indeed,    according   to   the   only   available 


THE    EMERGENCE    OF    THE    LABOR    PROBLEM        427 

statistics,  up  to  1867  there  were  only  three  years  in  which  more 
than  ten  strikes  had  occurred;  after  that  time,  however,  only 
one  year  shows  a  smaller  number  than  ten.  A  number  of 
strikes  was  inaugurated  in  1872  and  1873  by  the  Grand  Eight- 
hour  League,  which  were  unsuccessful  except  in  the  case  of 
the  building  trades  of  New  York  City.  The  crisis  of  1873  and 
the  resulting  depression  caused  great  industrial  disturbances, 
but  on  the  whole  the  time  was  not  prolific  of  strikes.  Sooner 
or  later,  however,  the  changes  which  had  taken  place  in  our 
industrial  development,  the  growth  of  large  capitalistic  in- 
dustries and  of  the  factory  system,  were  bound  to  result  in  a 
struggle  of  organized  labor  with  capital. 

The  railroad  strikes  of  1877  were  the  first  important  ex- 
hibition of  the  growing  power  of  labor,  and  directed  public 
attention  forcibly  to  the  industrial  problems  involved.  In 
that  year  strikes  occurred  on  the  Baltimore  and  Ohio,  the 
Pennsylvania,  and  other  railroads,  which  by  reason  of  their 
magnitude  and  their  wide-reaching  effects  have  become  his- 
toric. Reductions  had  been  made  in  the  wages  of  the  employees 
to  offset  the  decline  in  business  after  the  crisis  of  1873,  the 
tonnage  and  length  of  freight  trains  had  been  increased,  and 
various  other  causes  for  dissatisfaction  on  the  part  of  the 
employees  had  occurred,  which  finally  led  to  wide-spread  strikes 
on  a  number  of  lines,  but  especially  on  the  two  systems  named. 
Violence  was  used,  property  destroyed,  and  armed  conflicts 
took  place  between  troops  and  strikers,  resulting  in  consider- 
able loss  of  life.  The  country  awoke  to  the  fact  that  our 
growing  industrialism  had  brought  with  it  serious  problems  as 
well  as  increased  wealth. 

351.  Wages.  —  One  of  the  claims  of  organized  labor  is  that 
as  a  result  of  their  efforts  wages  have  been  raised.  Whether 
this  is  true  or  not,  it  can  hardly  be  disputed  that  the  general 
tendency  of  both  nominal  and  real  wages  in  the  United  States 
during  the  entire  history  of  the  country  has  been  upward. 
Owing  to  the  derangement  of  the  currency  during  and  after 
the  Civil  War  the  movement  during  the  period  between  1860 


42 S      ECOXOMIC   HISTORY    OF    THE    UXITED    STATES 

and  1880  cannot  be  altogether  satisfactorily  stated.  A  very 
crude  method  of  comparison  of  the  average  annual  wage  of  all 
employees  in  twent3--two  industries  shows  an  increase  from 
$335  in  1860  to  $346  in  1880.  VA'hile  the  immediate  effect  of 
the  currency  inflation  was  to  depress  wages  relatively,  since 
the  prices  of  all  commodities  for  which  the  workiugman  had 
to  spend  his  earnings  rose  so  much  more  rapidly  than  wages, 
by  1866  the  workingman  had  regained  all  he  had  lost  during 
the  war.  ''  The  year  1866,"  says  Professor  Adams,  ''  ushered 
in  a  new  epoch,  during  which,  it  is  no  exaggeration  to  say.  the 
American  workingman  advanced  in  a  manner  unprecedented 
in  this  count r}'  in  which  steady  progress  has  been  the  rule 
since  the  e-stablLshment  of  the  Union."  The  crlsLs  of  1873 
caused  a  temporar}'  fall  in  wages  and  an  increase  in  unemploy- 
ment, but  by  1880  wages  had  reached  a  higher  point  than  ever 
before.  According  to  the  Aldrich  report,  which  in  spite  of 
serious  defects  of  method  affords  the  best  data  for  present 
purposes  of  comparison,  relative  wages  averaged  according  to 
importance  rose  from  100  in  1860  to  143  in  1880:  on  the  same 
basis  they  had  been  82.5  in  1840.  The  same  fac-t  is  still  more 
clearly  Ulu-strated  by  taking  a  few  specific  cases  of  wages, 
which  are  briefly  pre.sented  in  the  following  table  compiled 
from  returns  given  in  the  Tenth  Census: 


Occupation 

1860 

1880 

Common  laborers   <X.  H.) 

Common  laborers   (Ind. j 

$6.00 
5.40 
9.00 
6.33 
3.28 

11. .52 
4.44 

$7.08 
600 

Mechanics  (R.  I.) 

Mule  spinners   (3ilass.) 

11.50 
10.09 

Frame  spinners  (Mass.) 

5  38 

Ring  spinners  (^lass.) - . 

Weavers  (Mass ) 

13.80 
644 

352.   Relation  of  wages  to  the  cost  of  living.  —  Statements 
as  to  changes  in  wages  are,  however,  comparativeh'  meaning- 


THE    EMERGENCE   OF    THE   LABOR   PROBLEM       429 

less  unless  supplemented  by  statistics  of  prices;  by  comparing 
the  two  we  can  determine  whether  the  condition  of  the  working 
classes  has  improved  or  not.  Taking  1860  as  the  base  and 
calling  prices  in  that  year  100,  the  Aldrich  report  shows  that 
the  relative  wholesale  prices  of  223  articles,  averaged  according 
to  importance,  had  risen  in  1880  to  103.4;  in  1840  they  were 
98.5.     That  is  to  say,  while  prices  had  risen  3  per  cent,  in  the 


220 
210 


180 


150 


80 


\ 

\ 

UNITED  STATES   PRICES 

"                < '          WARFS 

\ 

h 

ji 

\^r 

^ 

\ 

/     ' 

\ 

V. 

\  \ 

^■^\ 

\ 

""\ 

l- 

'~v^. 

J 

\ 

\ 

•"■\ 

/v/ 

Jl' 

V 

\ 

\ 

A 

V 

/^ 

V 

^_A- 

y"""^ 

220 
210 
200 
190 
180 
170 
160 
150 
140 
130 
120 
110 
100 
90 


1840   '45 


'50 


'60   '65 


'85 


'90 


Wages  and  Prices 
When  prices  rose  rapidly  during  the  Civil  War,  wages  lagged 
behind  and  did  not  overtake  prices  until  after  the  war  was  over. 
But  during  the  succeeding  period  of  falling  prices,  the  wage- 
earners  were  able  to  maintain  wages  at  nearly  the  same  level. 

twenty  years  after  1860,  wages  had  risen  43  per  cent.  It 
should  be  said,  however,  that  rents,  which  have  increased 
greatly,  were  not  included  in  these  figures;  further,  that  the 
greatest  rise  occurred  in  foodstuffs,  which  comprise  about  45 
per  cent,  of  the  expenditures  of  an  ordinary  workingman's 
family,  and  lastly  that  no  account  is  taken  of  unemployment 
in  these  statistics.     But  even  after  making  allowances  for  these 


430       ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

facts  and  for  errors  in  the  methods  of  calculating  the  changes, 
it  is  clear  that  a  vast  improvement  took  place  in  the  economic 
condition  of  the  great  body  of  wage-earners.  The  artisan  in 
1880  was  able  either  to  greatly  improve  his  standard  of  living 
over  what  it  had  been  in  1860,  or,  on  the  same  standard,  to  save 
almost  a  third  of  his  wages.  It  is  a  matter  of  common  observa- 
tion that  he  used  his  increased  earnings  for  both  purposes. 

At  the  same  time,  the  hours  of  labor  have  been  appreciably 
shortened:  in  1860  the  average  working  day  was  eleven  hours; 
by  1880  this  had  been  reduced  to  slightly  over  ten  hours.  At 
the  last  named  date  only  26.5  per  cent,  of  the  recipients  of 
regular  wages  worked  in  excess  of  ten  hours  per  day  as  com- 
pared with  81  per  cent,  in  1830.  When  to  these  statistical 
evidences  of  improved  well-being  are  added  such  things  as 
better  food,  better  education,  and  more  abundant  and  better 
used  leisure,  it  is  evident  that  this  period  marked  a  great  ad- 
vance in  the  lot  of  the  workingman. 

353.  Agricultural  labor.  —  So  far  we  have  confined  our 
attention  to  industrial  workers;  if  we  turn  now  to  the  history 
of  agricultural  labor  we  shall  not  find  so  bright  a  picture. 
While  there  was  advance  it  was  slow,  and  at  no  time  so  great 
as  in  the  case  of  urban  artisans.  Between  1866  and  1879  there 
was  a  fall  in  the  nominal  wages  (with  ])oard)  of  farm  laborers 
of  over  16  per  cent.;  if,  however,  we  take  into  account  the  con- 
temporaneous fall  in  prices,  real  wages  show  a  rise  of  about 
18  per  cent.  Little  change  had  probably  taken  place  in  the 
length  of  the  working  day,  though  the  introduction  of  agricul- 
tural machinery  had  undoubtedly  done  much  to  lighten  the 
severe  strain  of  farm  labor. 

In  the  South  the  labor  problem  was  so  different  from  that 
in  the  rest  of  the  country  as  to  necessitate  separate  discussion. 
With  emancipation  the  conditions  of  labor  were  revolutionized: 
three  million  laborers  passed  suddenly  from  a  state  of  slavery 
to  one  of  freedom.  The  negroes,  judging  labor  of  any  kind  a 
badge  of  slavery,  and  esteeming  idleness  the  greatest  blessing 
of  lil^erty,  deserted  the  plantations  in  large  numbers  and  sought 


THE    EMERGENCE    OF    THE    LABOR    PROBLEM       431 

their  pleasure  in  the  towns.  The  problem  in  the  South,  there- 
fore, was  not  so  much  the  organization  of  labor,  the  reduction 
of  hours  and  increase  in  wages,  as  the  more  fundamental  one 
of  how  to  secure  on  any  terms  the  necessary  labor  supply. 
Immigration  was  directed  to  the  South  as  little  after  the  war 
as  before  it,  and  reliance  had  therefore  to  be  placed  mainly 
upon  the  negroes.  The  wage  system  w^as  first  introduced  but 
was  abandoned  after  a  short  trial :  where  the  planter  furnished 
rations  and  promised  wages  at  the  end  of  the  year,  he  often 
found  himself  without  the  means  to  redeem  his  promises,  while 
the  idea  of  waiting  so  long  for  his  pay  was  distasteful  to  the 
negro.  Even  worse  was  the  system  of  weekly  or  monthly 
payments,  as  the  negro  usually  refused  to  work  again  until  he 
had  spent  all  his  earnings.  The  unsatisfactory  character  of 
the  wage  system  is  evidenced  in  part  by  a  fall  in  agricultural 
wages  of  over  25  per  cent,  between  1867  and  1868. 

354.  Farming  on  shares.  —  After  the  failure  of  the  wage 
system,  it  became  evident  that  the  negro  must  be  given  an 
interest  in  the  crop  and  be  made  at  least  partly  responsible  for 
the  consequences  of  his  idleness.  To  secure  this  result  the 
share  system,  or  '^  cropping  "  system,  was  introduced  through- 
out the  greater  part  of  the  South.  According  to  this  plan 
small  tracts  of  land  of  from  30  to  80  acres  were  rented  to  the 
negroes  on  shares:  if  the  tenant  furnished  his  own  tools,  seed, 
and  rations  —  which  was  seldom  the  case  —  he  received  two 
thirds  of  the  crop;  if  he  furnished  his  own  food,  but  had  his 
capital  supplied,  he  kept  half  of  the  crop;  but  if  he  was  furnished 
with  everything  by  the  landlord,  he  was  entitled  to  only  one 
third  of  the  crop.  While  this  system  secured  better  results 
than  the  preceding  wage  system,  in  stimulating  the  interest 
of  the  negro,  it  led  to  a  more  rapid  deterioration  of  the  land. 

In  view  of  what  has  just  been  said  the  conclusion  is  inevi- 
table that  the  industrial  efficiency  of  the  negro  was  not 
improved  by  emancipation;  his  incompetence  was  a  serious 
handicap  to  the  industrial  advance  of  the  South.  The  genera- 
tion that  grew^  up  in  the  period  following  the  Civil  War  lacked 


J   1 


432      ECONOMIC   HISTORY    OF    THE    UNITED    STATES 

the  industrial  training  received  by  their  parents  under  slavery 
and  consequently  showed  a  much  smaller  proportion  of  really 
skilled  laborers.  The  work  of  securing  for  them  this  industrial 
education  is  the  problem  of  negro  labor  in  the  South  to-day, 
and  as  such  will  claim  our  attention  in  the  next  chapter. 

SUGGESTIVE  TOPICS   AND  QUESTIONS.     CHAPTER   XXVIII 

1.  What  conditions  are  necessary  to  the  rise  of  a  distinct  dependent 
wage-earning  class?  [W.  J.  Ashley,  English  Economic  History,  part  2: 
220;  also  in  the  The  Early  History  of  the  Woollen  Industry,  Publ.  Amer. 
Econ.  Assoc,  II,  368;  Adams  and  Sumner,  Labor  Problems,  4-14.] 

2.  What  were  the  chief  nationalities  of  immigrants  up  to  1880? 
Their  geographical  and  industrial  distribution?  [Tenth  Census,  vols,  I,  II; 
Adams  and  Sumner,  Labor  Problems,  72;  Hall,  Immigration,  chap.  1; 
Mayo-Smith,  Emigration,  chap.  3.] 

3.  What  has  been  the  effect  of  the  employment  of  women  on  the  home? 
[Levasseur,  The  American  Workman,  338;  Wright,  in  Tenth  Census,  II, 
20  (552);  Adams  and  Sumner,  52;  Hobson,  Evol.  of  Mod.  Cap.,  319.] 

4.  Are  women  supplanting  men  in  industry?  [Levasseur,  335; 
Wright,  Ind.  Evol.,  203,  211;  Adams  and  Sumner,  56;  Walker,  Discussions 
in  Econ.  and  Stat.,  II,  241-244;  Bliss,  Encycl.  of  Soc.  Ref.,  art.  Women's 
Work  and  Wages.] 

5.  What  effect  does  the  employment  of  women  and  children  have  on 
wages?  on  the  total  income  of  a  family?  [Hobson,  Evol.  of  Mod.  Cap., 
chap.  12;  Adams  and  Sumner,  55;  Wright,  Ind.  Evol.,  210;  Levasseur, 
336-358;  Bhss.  Encycl.  of  Soc.  Ref.,  art.  Women's  Work  and  Wages.] 

6.  Can  the  interests  of  labor  be  best  promoted  by  protecting  capital  or 
by  direct  legislation  concerning  labor?  [Taylor,  The  Modern  Factory 
System,  177-227;  Webb,  The  Case  for  the  Factory  Acts,  192-223.] 

7.  Describe  the  history  of  the  National  Labor  Union  and  the  causes 
of  its  failure.     [Coman,  290;  Ely,  Labor  Movement,  69-70,  333-341.] 

8.  Are  strikes  usually  called  in  periods  of  prosperity  or  depression? 

9.  Describe  the  Knights  of  Labor  more  fully.  [Wright,  in  Quart. 
Journ.  Econ.,  Jan.,  1887;  Wright,  Ind.  Evol.,  246-252;  Powderly,  Thirty 
Years  of  Labor,  chaps.  4,  5,  6,  13;  Rep.  Ind.  Com.,  XVII,  part  2,  chap. 
2;  McNeill,  chap.  15.] 

10.  What  is  the  referendum?  Is  it  in  use  in  the  LTnited  States  to-day? 
[Bliss,  Encycl.  Soc.  Ref.,  arts.  Direct  Legislation  and  Referendum;  Ober- 
holtzer.  The  Referendum  in  America,  in  Penn.  Univ.  Publ.  Pol.,  Econ. 
and  Pub.  Law  Series,  vol.  4;  Oberholtzer,  Law  Making  by  Popular  Vote, 
m  Annals,  II,  324-344.] 

11.  What  was  the  effect  of  the  railway  strikes  of  1877  on  the  cause 


THE   EMERGENCE   OF    THE   LABOR   PROBLEM        433 

of  labor?  [Wright,  Ind.  EvoL,  201-206,  301-6;  Spofford's  American 
Almanac  for  1878,  pp.  105-112;  1st  An.  Rep.,  Bureau  of  Labor  Stat,  of 
Ohio,  287-289.] 

12.  Describe  some  of  the  early  attempts  at  cooperation  by  the  trade 
unions.  Were  they  successful  ?  [Adams  and  Sumner,  397-401,  413-419; 
Parsons,  Coop.  Undertakings  in  Europe  and  America,  in  Arena,  XXX,  159- 
167;  Hist,  of  Coop,  in  the  U.  S.;  Bolen,  Getting  a  Living,  67-96;  Bemis, 
Coop.  Distrib.,  in  Bull,  of  Y.  S.  Dept.  of  Lab.,  no.  6,  610-644.] 

13.  What  was  the  Aldrich  report?  What  are  "index  numbers," 
and  the  meaning  of  the  figures  in  the  Aldrich  report?  [Bullock,  Intro., 
220;  Hadley,  Econ.,  193-195;  Spahr,  Distrib.  of  Weahh,  103.] 

14.  Define  absolute  and  relative  wages;  nominal  and  real  wages. 
[Gide,  492-496;  Bullock,  Intro.,  402,  405;  Levasseur,  The  Amer.  Work- 
man, 393.] 

15.  What  effect  did  the  issue  of  greenbacks  have  on  wages?  [Mitchell, 
Hist,  of  Greenbacks,  chap.  5;  Dewey,  Fin.  Hist.,  292-294.] 

16.  Give  some  specific  instance  of  changes  in  wages  and  cost  of  living 
with  which  you  are  familiar. 

17.  Was  the  falling  off  in  cotton  production  in  the  South  from  1860 
to  1870  due  more  largely  to  lack  of  capital  or  unwiUingness  of  labor? 

SELECTED   REFEREXCES.     CHAPTER   XXVIII 

**Adams  and  Sumner:  Labor  Problems,  chaps.  2,  3,  6,  7,  12,  13. 

** Tenth  Census  (1880),  vol.  2. 

*]\IcXeill:  The  Labor  Movement,  chap.  5. 

*-Mayo-Smith:  Emigration  and  Immigration,  chaps.  1,  3,  7,  8,  12. 

*Mitchell:  Organized  Labor,  chap.  8. 

*Wright:  Industrial  Evolution  of  the  L'nited  States,  chaps.  24-26. 

Carnegie:  Triumphant  Democracy,  chaps.  5,  8. 

Ely:  The  Labor  Movement  in  America,  chap.  3. 

Fleming:  Industrial  System  in  Alabama  after  the  Civil  War. 

Powderly:  Thirty  Years  of  Labor. 

Simonds:  Story  of  Manual  Labor,  435-464,  626-670. 

Wells:  Recent  Economic  changes,  chaps.  9,  10, 


29 


CHAPTER   XXIX 
LABOR  AND   LABOR  ORGANIZATIONS     (1880-1906) 

355.  The  growth  of  population.  —  The  population  of  the 
United  States  increased  from  50,156,000,  in  1880  to  83,960,000 
in  1906,  not  including  the  population  of  the  outlying  posses- 
sions. It  is  evident  that  such  an  enormous  increase  in  num- 
bers must  have  had  far-reaching  effects  upon  our  industrial 
growth,  not  merely  by  supplying  additional  labor  force,  but 
by  creating  new  demands  for  the  products  of  industry.  As  a 
result  of  its  absorption  to  a  large  extent  in  industrial  estab- 
lishments there  has  at  the  same  time  gone  on  a  more  than 
proportionate  growth  of  the  urban  population,  w^hich  in  the 
course  of  a  century  has  increased  from  about  3  to  33  per  cent, 
of  the  total.  Especially  since  the  development  of  the  factory 
system  after  1850,  and  even  more  in  the  last  two  decades,  an 
increasing  proportion  of  the  population  has  gravitated  to  the 
cities.  This  is  especially  true  of  the  recent  immigrants,  who 
are  concentrating  in  our  industrial  centers,  partly  because  they 
find  there  friends  and  opportunities  for  immediate  employ- 
ment, and  partly  because  more  of  them  come  from  large  cities 
in  Europe  than  was  formerly  the  case.  The  table  on  top  of 
page  435  presents  briefly  the  more  important  facts  as  to  the 
growth,  composition,  and  distribution  of  the  population  since 
1850: 

356.  The  compogition  of  the  population.  —  It  w  ill  be  noticed 
that  in  spite  of  the  large  foreign  immigration  the  rate  of  in- 
crease in  the  population  has  fallen  off.  As  the  country  has 
become  more  thickly  settled,  the  economic  limits  of  production 
have  checked  the  rapid  growth  of  the  population.  Of  more 
serious  import  is  the  fact  that  the  rate  of  growth  of  the  native- 

434 


LABOR    AND    LABOR    ORGANIZATIONS 


435 


The  Population  of  the  United  States,   1850-1900 


Percentage  of 

Immigra- 

Percentage of 

Growth  of 

tion  during 

Total  in 

Population 

Decade 

Towns  of 

Date 

White 

Colored 

Total 

during  Dec- 
ade ending 
with  Year 

ending  with 
Year 

8,000  Inhabi- 
tants or 
Over 

1850  .  . 

19,553,068 

3,638,808 

23,191,876 

35.9 

1,713,251 

12.49 

1860  .  . 

27,001,491 

4,441,830 

31,443,321 

35.6 

2,598,214 

16.13 

1870  .  . 

33,678,362 

4,880,009 

38,558,371 

22.6 

2,314,824 

20.93 

1880  .. 

43,574.990 

6,580,793 

50,155,783 

30.1 

2,812,191 

22.57 

1890  . . 

55,166,184 

7,903,572 

63,069,756 

24.9 

5,246,613 

29.20 

1900  . . 

66,990.788 

9,312,599 

76,303,387 

20.7 

3,844.359 

33.10 

born  population  has  declined  with  the  influx  of  immigrants 
and  is  to-day  slower  than  that  of  the  foreign  stock.  General 
Francis  A.  Walker  was  of  the  opinion  that  in  the  long  run 
immigration  had  not  increased  the  population  of  the  United 
States,  but  had  merely  "  replaced  native  by  foreign  stock." 
In  1900  the  composition  of  the  population  was  as  follows: 


Group 

Total  Number 

Per  cent. of  Total 
Population 

Native  born  with  native  parents 

Native  born  with  one  or  both  parents 

foreign 

Foreign  born 

Colored 

41,053,417 

15,687,322 

10,250,049 

9,312,599 

53.5 

20.6 
13.7 
12.2 

Total    

76,303,387 

100.0 

Probably  no  modern  nation  in  the  world  is  composed  of 
such  heterogeneous  elements  as  the  American.  Within  the 
past  century  more  than  20,000,000  immigrants  have  come  to 
these  shores  from  every  country  in  Europe.  Formerly,  most 
of  the  immigrants  were  from  Germany,  England,  or  Ireland, 
and  were  easily  assimilated  by  the  native  population.  During 
the  past  twenty-five  years  the  character  of  immigration  has 


f 

r 

1 

-. 

5839-40 

1841-42 
1842-13 
1843-44 
1844-15 
1845-46 
1846-47 
1847-48 
'1848-49 
1849-50 
1850-51 
1851-52 
1852-53 
1853-54 
1854-55 
1855-56 
1856-57 
J  857-58 
1858-59 
1859-60 
1860-61 
1861-62 
1862-63 
1863-64 
1864-65 
1865-66 
1866-67 
1867-68 
1868-69 
1869-70 
1870-71 
1871-72 
1872-73 
1873-74 
1874-75 
1875^76 
1876-77 
1877-78 
1878-79 
1879-80 
1880-81 
1881-82 
1882-83 

{ 

\ 

C. 

"OREIGN  IMMIGRATION  TO 
1840-190 

NUMBER  OF  IMMIGRANTS 
NUMBER  OF  IMMIGRANTS 
TO  10,000  POPULATION 

(TO  YEAR  ENDING  DEC.  31,  I85b, 
PASSENGERS  ARRIVED;   AFTER  > 
DEC. 31,   1855,  IMMIGRANTS  ARR 

1841^2 
1842-43 
1843-44 
1844-45 
1845-46 
1840-47 
1847-48 
1848-49 
1849-50 
1850-51 
1851-52 
1852-53 
1853-54 
1854-55 
1855-56 
1856-57 
1857-58 
1858-59 
1859-60 
1860-61 
1861-62 
1862-63 
1863-64 
1864-65 
1865-66 
1866-67 
1867-68 
1868-69 
1869-70 
1870-71 
1871-72 
1872-73 
1873-74 
1874-75 
1875-76 
1876-77 
1877-78 
1878-79 
1879-80 
1880-81 
1881-82 
1882-83 
1883-84. 
1884-85 
1885-86 
1886-87 
1887-88 
1888-89 
1889-90 
1890-91 
1891-92 
1892-93 

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1900-01, 

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LABOR   AND    LABOR    ORGANIZATIONS  437 

greatly  changed,  large  numbers  coming  from  Austria-Hungary, 
Russia,  Poland,  and  Italy.  Less  easily  amalgamated  with  the 
native  population,  and  bringing  with  them  a  lower  standard 
of  living,  their  presence  has  given  rise  to  new  and  serious 
problems. 

357.  Restrictive  legislation.  —  So  far  most  of  the  immigrants 
have  settled  north  of  Mason  and  Dixon's  line,  and  recently 
seem  to  have  preferred  the  more  thickly  peopled  sections  of 
the  country;  in  1900  over  86  per  cent,  were  to  be  found  in  the 
North  Atlantic  and  Central  States,  while  only  6  per  cent,  were 
in  the  South.  The  population  of  foreign  origin  is  in  excess  of 
the  native-born  in  sixteen  States  of  the  Union.  To-day  the 
native  American  is  to  be  sought,  not  in  the  home  of  his  Puritan 
ancestors,  but  in  the  South  and  \Yest,  in  the  newer  sections  of 
the  country. 

The  enormous  increase  in  the  number  of  immigrants,  their 
changed  character  and  tendency  to  concentrate  in  the  large 
industrial  centers,  and  finally  the  taking  up  of  the  available 
lands  in  this  country,  has  led  to  legislation  restricting  immigra- 
tion. The  States  of  New  York,  Massachusetts,  and  California 
passed  laws  regulating  immigration  into  their  territory,  but 
these  were  declared  unconstitutional  in  1876.  The  first  re- 
strictive federal  legislation  was  an  act  passed  in  1882  limiting 
Chinese  immigration  for  ten  years;  two  years  later  the  restric- 
tion was  made  absolute.  In  1882  also  a  law  was  passed  for- 
bidding the  landing  of  convicts,  idiots,  lunatics,  and  persons 
liable  to  become  a  public  charge,  and  requiring  their  return  at 
the  expense  of  the  ship  which  brought  them  here.  In  1885 
the  importation  of  convict  labor  was  forbidden.  The  more 
recent  legislation  of  1891,  1893,  and  1903  has  not  materially 
changed  these  provisions;  an  attempt  to  impose  an  educational 
restriction  on  immigrants  was  made  in  1897,  and  again  in 
1906,  but  failed  to  become  law. 

358.  Industrial  distribution  of  the  population.  —  As  might 
be  expected  in  an  industrially  developed  country  like  the 
United  States,  most  of  the  men  are  at  work;  80  per  cent,  of 


438      ECONOMIC   HISTORY    OF    THE    UNITED    STATES 

males  over  30  years  of  age  were  returned  by  the  census  of  1900 
as  engaged  in  gainful  occupations,  a  slight  increase  over  the 
proportion  so  employed  in  1880.  The  percentage  of  females 
over  ten  years  of  age  at  work  for  a  money  wage  increased  during 
the  same  period  from  15.2  to  18.3  per  cent,  of  all  persons  em- 
ployed; this  increase  occurred  chiefly  in  manufacturing  and 
mechanical  pursuits.  A  third  of  the  population  is  still  engaged 
in  agriculture,  but  the  proportion  is  constantly  growing  smaller, 
while  the  manufacturing  and  transportation  industries  for  the 
most  part  absorb  those  who  desert  the  fields;  about  40  per  cent, 
of  the  population  is  employed  in  these  occupations.  Almost 
tw^o  thirds  (62.9  per  cent.)  of  the  immigrants  find  employment 
in  manufacturing  and  mechanical  pursuits  and  domestic  and 
personal  service,  the  males  in  the  former  and  the  females  in  the 
latter. 

The  majority  of  the  foreign-born  are  unskilled  laborers, 
and  this  concentration  in  a  few  occupations  and  in  a  few  in- 
dustrial centers  has  greatly  intensified  the  evils  of  competition 
and  has  given  rise  to  serious  problems,  such  as  the  sweating 
system.  It  has  aggravated  the  problem  of  unemployment  and 
threatened  to  reduce  wages  to  a  lower  standard  of  living  in 
those  localities  and  industries  where  the  pressure  is  greatest. 
But  in  the  long  run  the  new  infusions  have  been  successfully 
absorbed  by  the  native  population.  The  labor  unions  have 
succeeded  in  enlisting  most  of  the  foreign-born  laborers  in  their 
ranks,  and  have  thus  prevented  the  reduction  of  the  wage 
level  to  the  lower  standard.  The  evil  effects  of  this  compe- 
tition have  also  been  partially  averted  by  the  movement  of 
native  labor  into  higher  pursuits  which  called  for  greater  skill; 
while  the  rough,  heavy  manual  toil  has  generally  been  left  for 
the  recent  immigrant. 

359.  The  efficiency  of  labor.  —  The  growth  of  large  scale 
production,  the  concentration  of  industry,  and  the  immigra- 
tion of  large  numbers  of  unskilled,  capitalless  laborers  have  all 
tended  to  produce  a  wage-earning  class,  and  have  caused  the 
status  of  the  American  laborer  to  approach  more  nearly  that 


LABOR    AND    LABOR    ORGANIZATIONS  439 

of  his  European  cousin.  And  yet  foreign  observers  are  agreed 
in  attributing  to  American  labor  certain  special  character- 
istics: according  to  the  commissioners  of  the  British  Iron  Trade 
Association,  "  the  American  workman  is  generally  very  nimble- 
minded,  versatile,  alert,  and  intelligent,  quick  to  pick  up  new 
ideas,  and  equally  ready  to  apply  them."  Professor  Levasseur 
is  struck  by  their  energy,  ambition,  and  resourcefulness,  and 
especially  by  the  pains  which  they  take  to  economize  labor. 
From  early  colonial  days  labor  has  always  been  relatively 
scarce  and  high-priced  and,  wherever  possible,  machinery  has 
been  introduced  to  supplement  human  muscle  and  brain.  As  *- 
a  result,  the  productivity  of  the  American  worker  is  greater 
than  that  of  any  other  laborer  in  the  world,  and  has  made 
possible  the  enormous  production  described  in  the  preceding 
chapters.  On  the  other  hand,  accusations  are  often  brought 
against  the  high  pressure  at  which  the  American  laborer  is 
compelled  to  work  by  steam-driven  machinery,  the  intensity 
and  monotony  of  his  toil,  and  the-  narrowing  of  the  field  for 
responsible  labor.  There  is,  however,  less  danger  from  monot- 
ony of  work,  as  Professor  Marshall  points  out,  than  from 
monotony  of  life,  and  of  this  there  is  certainly  less  in  the  case 
of  the  modern  factory  operative  than  of  the  peasant  drudge. 
The  immense  increase  in  production  brought  about  by  the  use 
of  machinery  is  shown  by  the  comparisons  on  page  440. 

360.  Labor  legislation.  —  The  very  qualities  which  have 
made  the  American  workman  such  an  efficient  producer  have  ' 
disinclined  him  to  rely  upon  the  government  for  improvment 
in  his  condition,  and  to  trust  rather  to  his  own  efforts  for  self- 
help.  Government  interference  is  accordingly  not  invoked  to 
regulate  the  freedom  of  the  wage-contract  or  of  employment,  ^ 
which  are  regarded  as  constitutional  rights;  but  legislative 
protection  has  been  extended  to  the  working  classes  by  factory 
inspection  and  legislation,  by  laws  regulating  child  labor,  hours, 
and  conditions  of  labor.  About  half  the  States  have  passed 
factory  acts  regulating  the  conditions  of  labor  in  factories  and 
providing  for  their  enforcement  by  the  appointment  of  factory 


440      ECONOMIC   HISTORY    OF    THE    UNITED   STATES 


inspectors.  These  laws  generally  provide  for  sanitary  condi- 
tions and  sufficient  air  space;  for  the  health  and  safety  of  the 
employees  against  fire,  the  unhealthf illness  of  the  work,  and  the 
danger  from  machiner}^;  and  for  other  forms  of  protection  to 
the  life,  well-being,  and  morality  of  the  employees. 


Year  of 
Pro- 

Article Pro- 
duced 

Different 
Operations 
Performed 

Different 
Workmen 
Employed 

Time  Worked 

Labor 
Cost 

Cost 

per 

Hour 

duction 

Hours 

Min. 

1829-30 
1895-96 

1859 
1895 

1813 
1897 

1850 
1895 

1891 
1896 

Wheat  (hand  ) . . . . 
"       (machine).. 

Boots  (hand) 

"      (machine)..  . 

Nails  (hand) 

"      (machine)... 

Carpet  (hand) 

(machine).. 

Loading  ore  (hand) 
"  (mach.) 

8 
5 

83 
122 

3 
20 

15 
41 

1 
3 

4 
6 

2 
113 

3 

83 

18 
81 

1 
10 

61 
3 

1436 
154 

236 
1 

4047 
509 

200 

2 

5 
19 

40 
5 

25 
49 

30 
1 

51 

$3.55 
.66 

408.50 
35.40 

20.24 
.29 

270.01 
91.26 

40.00 
.55 

$.058 
.21 

.28 
.23 

.086 
.13 

.06 
.17 

.20 
.22 

Laws  limiting  the  number  of  hours  of  labor  have  been 
passed  by  the  Federal  government  and  some  fifteen  States  for 
those  engaged  on  public  works.  Attempts  to  fix  the  hours  of 
labor  in  private  industries  for  adult  men  have  generally  been 
held  unconstitutional,  except  for  especially  unhealthy  or  dan- 
gerous occupations  such  as  bakeries,  mines,  smelters,  etc.  On 
the  other  hand,  the  length  of  the  working  day  for  women  and 
children  has  been  regulated  in  about  twenty  of  the  States; 
until  1880  Massachusetts  had  been  the  only  State  limiting 
the  hours  of  labor  of  women  and  children.  The  employment 
of  children  was  very  generally  regulated  by  the  industrial 
States  in  the  decade  1880-1890,  and  the  number  of  children 
employed  in  manufactures  declined  33.6  per  cent,  during  that 


LABOR   AND    LABOR    ORGANIZATIONS 


441 


period.  Since  1890  there  has  once  more  been  an  increase  (of 
39.5  per  cent.),  almost  to  the  figures  of  1880,  owing  largely  to 
the  development  of  the  cotton  manufacturing  industry  in  the 
southern  States,  where  almost  no  factory  legislation  exists  as 


Breaker  Boys  at  a  Coal  Mixe  ix  Kixgstox,  Pa. 
After  being  mined,  the  coal  is  hoisted  to  the  top  of  a  "breaker," 
and  then  passes  down  chutes  to  the  raihvay  cars.     On  the  way 
down  the  slate  is  picked  out  by  breaker  boys,  and  by  means  of 
screens  the  coal  is  cleaned  and  sorted  into  various  sizes. 


yet.  In  1904  there  were  1,752,187  children  between  the  ages 
of  ten  and  fifteen  years  at  work  in  the  United  States,  or  18  per 
cent,  of  all  children  of  these  ages. 

361.  Further  protection  to  labor.  —  In  common  with  other 
countries,  especially  England  and  Australia,  efforts  have  been 
made  in  the  United  States  to  protect  the  interests  of  labor  in 
other  directions  than  those  just  described.  More  than  twenty 
States  have  passed  laws  requiring  wages  to  be  paid  weekly, 
bi-weekly,  or  monthly,  and  prohibiting  ^'  truck  "  payments, 
but  most  of  these  have  been  held  unconstitutional.     Nor  has 


442       ECONOMIC   HISTORY    OF    THE    UNITED    STATES 

the  attempt  to  extend  the  liabiUty  of  the  employer  for  injuries 
received  by  his  employees  in  the  course  of  employment  been 
much  more  successful.  Under  the  common  law  an  employer 
is  bound  to  provide  reasonably  safe  conditions  of  labor,  but 
is  not  responsible  for  risks  incident  to  the  business,  or  for 
injuries  caused  by  the  negligence  of  a  fellow-servant  or  of  the 
employee  himself.  By  invoking  the  principle  of  the  fellow- 
servant  the  employer  was  generally  able  to  evade  all  responsi- 
bility for  industrial  accidents.  Consequently,  eleven  States 
have  passed  laws  ^'  which  do  away  with  the  fellow-servant 
doctrine  entirely,  making  the  employer  liable  in  all  cases  of 
accident,  whether  caused  by  fellow-servants  or  not,  unless 
primarily  caused  by  negligence,  or  by  contributory  negligence 
of  the  person  injured,"  while  some  sixteen  others  have  modified 
the  common  law  on  this  subject.  On  the  other  hand,  no  at- 
tempt has  been  made  by  either  federal  or  State  government  to 
provide  for  compulsory  insurance  against  accident,  sickness,  or 
old  age,  although  these  forms  of  insurance  have  been  developed 
by  a  few  large  employers,  notably  the  railroad  companies,  and 
by  the  trade-unions. 

362.  Labor  organizations.  —  The  individualistic  character 
of  American  law  has  led  the  courts  generally  to  declare  uncon- 
stitutional the  well-meant  endeavors  of  our  legislatures  to 
protect  the  working  classes  by  statute.  The  American  work- 
man has  therefore  been  forced  to  depend  largely  upon  his  own 
efforts  for  protection  and  improvement.  The  growth  of  labor 
organizations  has  proceeded  pari  passu  with  the  industrial 
development  of  the  country,  and  has  been  especially  rapid  since 
the  Civil  War.  The  early  history  of  the  Knights  of  Labor,  a 
national  amalgamation  of  mixed  assemblies  in  which  members 
of  any  trade  were  received,  has  already  been  described.  Li 
1880  this  was  the  most  important  labor  organization  in  t-he 
United  States;  in  1886,  the  period  of  its  greatest  growth,  it 
claimed  a  membership  of  730,000.  In  that  year  it  entered 
upon  a  series  of  disastrous  strikes;  later  it  came  into  conflict 
with  trade-unions  which  had  not  joined  its  ranks;  and  finally 


LABOR   AND    LABOR   ORGANIZATIONS  443 

it  became  entangled  in  politics.  As  it  lost  in  power  and  num- 
bers its  place  was  taken  by  the  American  Federation  of  Labor. 

This  organization  was  formed  in  1881,  with  a  membership 
of  262,000,  by  a  number  of  unions  which  had  become  dissatis- 
fied with  the  rule  of  the  Knights  of  Labor.  The  platform 
adopted  did  not  differ  much  from  that  of  the  Knights,  but  the 
basis  of  organization  was  essentiall}'  different.  Whereas  the 
government  of  the  earlier  organization  was  highly  centralized 
and  the  order  itself  was  composed  of  distinct  assemblies  with 
little  local  automony,  into  which  workers  in  any  trade  were 
admitted,  the  Federation  of  Labor  was  its  antithesis  on  all 
these  points.  It  is  a  ''  confederation  of  trade  and  labor  unions," 
each  trade  is  organized  separately,  and  the  unions  alone  are 
represented  in  the  national  body.  Great  care  is  taken  not  to 
interfere  with  the  local  autonomy  of  the  constituent  unions, 
only  matters  of  general  interest  coming  before  the  national 
body.  It  has  grown  steadily  in  influence,  which  has  generally 
been  conservative,  has  avoided  political  entanglements,  and 
has  seen  its  membership  grow  from  200,000  in  1890  to  550,000 
in  1900,  and  1,745.000  in  1903.  The  railroad  unions  stand 
outside  the  American  Federation  of  Labor  with  a  membership 
of  125,000  in  1901.  Altogether,  about  ten  per  cent,  of  the 
working  population  is  enrolled  in  labor  organizations. 

363.  Union  methods  and  policies.  —  In  order  to  control  the 
conditions  of  labor  the  trade  unions  aim  at  a  more  or  less  com- 
plete monopoly  of  the  labor  market.  This  they  may  do  either 
by  bringing  all  workers  in  a  trade  within  the  organization,  or 
by  preventing  non-union  men  from  working.  The  policy  of 
the  "  closed  shop,"  the  limitation  of  apprentices,  and  similar 
methods  are  used  to  enforce  their  monopolistic  control;  some- 
times they  have  united  with  their  employers  by  means  of  "  ex- 
clusive agreements  "  to  raise  wages  and  prices  and  thus  jointly 
mulct  the  public.  A  minimum  wage  and  an  eight -hour  work- 
ing day  are  two  aims  generally  held  by  the  trade  unions. 
Piece-work  is  vigorously  opposed  by  a  number  of  the  unions, 
although  it  or  a  similar  method,  such  as  the  premium  system, 


444      ECONOMIC    HISTORY    OF    THE    UNITED   STATES 

is  coming  into  more  general  use.  While  they  always  deny  the 
imputation,  many  unions  have  opposed,  and  still  do  oppose, 
the  introduction  of  labor-saving  machinery,  and  have  placed 
limitations  upon  output  either  by  explicit  rule  or  by  social 
pressure.  The  boycott  is  a  dangerous  weapon  in  industrial 
disputes,  which,  however,  seems  decreasing  in  frequency  and 
importance.  So,  too,  resort  to  violence  during  strikes,  whether 
toward  strike-breakers  or  the  property  of  employers,  has 
happily  fallen  off  as  labor  leaders  have  realized  the  necessity 
of  not  alienating  public  opinion.  While  insisting  on  the  neces- 
sity of  the  right  to  strike,  most  of  the  unions  have  endorsed 
the  principle  of  arbitration,  and  advocate  the  general  use  of 
the  union  label  as  a  peaceful  method  of  securing  the  enforce- 
ment of  union  conditions  in  the  trade  where  the  label  is  adopted. 

364.  Employers'  associations.  —  The  organization  of  em- 
ployers for  the  purpose  of  extending  their  trade,  and  even  of 
treating  with  labor,  is  not  a  new  phenomenon.  But  the  last 
ten  years  has  seen  the  growth  of  a  new  purpose  and  new  methods 
of  organization  which  mark  a  distinct  era  in  the  labor  move- 
ment in  the  United  States.  Probably  the  first  national  asso- 
ciation of  employers  was  the  Stove  Founders'  National  Defence 
Association,  formed  in  1886.  It  was  followed  by  others,  until 
at  the  present  time  there  are  national  organizations  in  the 
seven  industries  of  stove  and  furnace  manufacturing,  metal 
foundry  work,  lake  transportation,  machine  construction, 
publishing  and  printing,  marble  cutting,  and  ready-made 
clothing.  These  associations  are  counterparts  in  those  indus- 
tries of  the  labor  organizations  with  which  they  can  and  do 
conclude  contracts  regulating  wages  and  conditions  for  prac- 
tically the  whole  country.  Furthermore,  there  has  existed 
since  1895  a  Federal  organization  of  employers,  corresponding, 
though  but  distantly,  to  the  American  Federation  of  Labor  — 
the  National  Association  of  Manufacturers  —  with  a  member- 
ship of  500  local  associations  and  3500  manufacturing  firms. 

While  the  earlier  employers'  associations  contributed  greatly 
to  the  maintenance  of  industrial  peace  by  collective  or  joint 


LABOR   AND   LABOR   ORGANIZATIONS  445 

bargaining  with  the  labor  unions,  they  devoted  themselves 
chiefly  to  the  extension  of  their  trade.  As  the  strength  and 
power  of  the  labor  unions  grew  many  employers  thought  they 
saw  in  their  demands  a  menace  to  business,  and  some  of 
the  later  organizations  have  been  formed  with  the  explicit 
purpose  of  opposing  certain  union  principles.  These  militant 
associations  formed  in  1903  a  federated  "  Citizens'  Industrial 
Association  of  America,"  comprising  60  national  associations, 
66  State  and  district  associations,  and  335  local  or  municipal 
associations  of  employers.  Unless  they  exhibit  a  more  con- 
ciliatory spirit  than  is  evidenced  in  their  official  utterances, 
some  bitter  fights  may  be  expected  between  the  now  strongly 
organized  forces  of  capital  and  labor,  before  permanent  in- 
dustrial peace  is  secured. 

365.  Industrial  disputes.  —  While  industrial  disputes  are  not 
new  they  are  intimately  connected  with  the  wage  system, 
and  have  become  prominent  in  the  United  States  as  the  system 
of  capitalistic  industry  has  developed.  The  table  on  page  446 
presents  the  most  important  facts  for  the  twenty  years,  1880- 
1900,  in  this  connection. 

It  will  be  noticed  that  there  has  been  a  relative  decrease  of 
strikes  since  high-water  mark  was  reached  in  1886.  In  that 
year  there  were  a  number  of  disastrous  strikes,  accompanied 
by  violence,  destruction  of  property,  and  much  bad  feeling; 
these  were  inaugurated  chiefly  by  the  Knights  of  Labor,  which 
lost  much  of  its  power  after  their  failure.  Since  then  the 
labor  unions  have  been  much  more  conservative  in  the  use  of 
the  strike.  As  they  have  grown  in  strength  their  organization 
has  improved  and  they  have  come  under  the  control  of  more 
intelligent  leaders.  In  the  most  strongly  organized  trades 
strikes  are  relatively  fewer,  but  are  more  apt  to  be  successful 
than  in  the  weakly  organized  industries.  Over  one  third  of 
all  the  strikes  have  occurred  in  the  building  trades,  in  the  coal 
and  coke  industry,  and  in  the  manufacture  of  metals'  and 
metallic  goods.  The  most  prolific  cause  of  strikes  is  naturally 
the  demand  for  increase  of  wages;  over  58  per  cent,  involve  the 


446       ECONOMIC    HISTORY    OF    THE    UNITED    STATES 


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LABOR    AND    LABOR    ORGANIZATIONS  447 

question  of  wages  or  hours;  if  to  these  be  added  the  sympa- 
thetic strike,  strikes  against  the  employment  of  non-union 
men,  and  for  recognition  of  the  union,  two  thirds  of  all  strikes 
during  the  past  twenty  years  are  accounted  for.  The  public 
is,  however,  aw^akening  to  the  conviction  that  it  suffers  the 
greatest  injury  as  the  innocent  third  party  to  every  dispute, 
and  is  insisting  upon  more  reasonable  methods  of  maintaining 
industrial  peace  and  of  settling  disturbances  than  by  a  resort 
to  the  strike  or  lockout. 

366.  Maintenance  of  industrial  peace.  —  With  the  growth 
of  organization  on  the  part  of  labor  and  of  employers  the  pro- 
cess of  collective  bargaining  has  been  resorted  to  in  many 
trades,  by  which  a  formal  contract  is  drawm  up  and  signed  by 
representatives  of  the  tw'o  parties  as  the  result  of  a  mutual 
agreement.  Thus  discussion  is  substituted  for  dictation. 
While  this  method  involves  the  recognition  of  the  trade  union, 
it  secures  fair  treatment  to  both  laborer  and  employer,  and 
generally  obviates  a  resort  to  strikes.  This  system  of  joint 
conferences  for  the  establishment  of  wage-scales  dates  from 
1865  in  the  United  States,  w^hen  it  was  introduced  into  the 
iron  industry;  to-day  it  is  a  common  method  in  the  strongly 
organized  trades. 

Boards  of  conciliation  are  often  provided  for,  which  endeavor 
by  means  of  discussion  and  mutual  concession  to  prevent 
disputes  from  arising.  Should  a  dispute,  however,  be  un- 
avoidable, provision  is  usually  made  for  its  reference  to  a  board 
of  arbitration,  which  may  be  selected  l)y  the  disputants  or 
consist  of  an  outside  body,  voluntary  sometimes  and  at  others 
created  by  the  State.  Governmental  boards  of  arbitration 
have  been  established  by  the  Federal  government  and  twenty- 
four  of  the  States,  but  their  powers  and  influence  have  so  far 
been  very  limited  in  practice.  Employers  have  often  urged 
that  the  trade  unions  are  too  irresponsible  under  present  con- 
ditions, and  before  they  ask  for  collective  bargaining  and 
arbitration  of  industrial  disputes,  should  be  incorporated. 
Only  after. their  legal  incorporation  could  they  be  held  liable 


448      ECONOMIC   HISTORY   OF    THE    UNITED   STATES 

in  damages  for  a  breach  of  contract.  So  far,  however,  the 
unions  have  preferred  their  position  of  irresponsibility  and 
immunity  and  have  refused  to  be  incorporated. 

367.  Wages  and  prices.  —  More  important  than  problems  of 
organization  is  the  question  as  to  whether  the  material  con- 
dition of  the  laboring  classes  has  improved.  The  decade  1880 
to  1890  was  one  of  great  prosperity,  except  for  a  short  period 
of  depression  in  1884,  and  the  course  of  wages  was  steadily  up- 
ward. During  the  long-continued  industrial  depression  which 
followed  the  panic  of  1893,  wages  declined  somewhat,  and  there 
w^as  considerable  unemployment  and  distress  among  the  work- 
ing people;  but  the  year  1898  saw  the  beginning  of  a  period  of 
unexampled  prosperity,  as  a  result  of  which  wages  have  reached 
the  highest  point  ever  attained  in  the  United  States,  while 
unemployment  has  been  reduced  to  a  minimum.  Continuing 
the  calculations  of  the  Aldrich  report, ^  we  find  that  relative 
nominal  wages  rose  from  143  in  1880  to  168.2  in  1890  and  187 
in  1903;  at  the  same  time  relative  prices  fell  from  103.4  in  1880 
to  95.7  in  1890,  after  which  they  increased  again  to  about  the 
former  figure  in  1903.  By  combining  these  two  we  find  that 
relative  real  wages  increased  during  this  period  from  100  in 
1880  to  124.6  in  1903. 

The  average  length  of  the  working  day  at  the  same  time 
decreased  from  10.3  hours  in  1880  to  9.6  hours  in  1903,  thus 
bringing  the  trade  union  ideal  of  a  universal  eight -hour  day 
appreciably  nearer.  The  material  progress  of  the  people  can 
further  be  fairly  accurately  gaged  by  their  consumption  of  cer- 
tain semi-luxuries,  like  tea,  coffee,  sugar,  tobacco,  beer,  etc., 
all  of  w^hich  show  a  steady  increase.  "  Thus  in  the  United 
States  betw^een  1871  and  1903  inclusive,  the  per  capita  con- 
sumption of  coffee  increased  from  7.91  to  10.79  pounds,  that  of 
sugar  from  36.2  to  71.1  pounds,  that  of  malt  liquors  from  6.10 
to  18.04  gallons,  that  of  wheat  and  flour  from  4.69  to  5.81 
bushels."  There  has  been  a  steady  improvement  in  the  stand- 
ard of  living,  as  is  evidenced  not  only  by  increased  wages  and 
'  See  chap.  28,  sect.  351-352. 


LABOR   AND   LABOR   ORGANIZATIONS  449 

leisure,  but  by  improved  homes,  dress,  and  other  articles  of 
consumption. 

The  facts  so  far  presented  concern  only  workers  in  the 
manufacturing  and  mechanical  industries  of  the  country. 
The  improvement  in  the  condition  of  farm  labor  has  not  been 
so  rapid;  indeed,  after  the  Civil  War  there  was  a  steady  decline 
in  farm  wages,  from  $12.50  a  month  with  board,  in  1866,  to 
$10.43  in  1879,  when  the  lowest  point  was  reached.  Since  then 
there  has  been  a  rapid  and  fairly  steady  rise  in  farm-wages  to 
$16.40  in  1902,  a  gain  of  32  per  cent,  since  1866. 

368.  Labor  in  the  South.  —  The  greater  proportion  of  the 
labor  in  the  South  is  furnished  by  negroes,  and  the  majority 
of  these  are  engaged  in  agriculture.  According  to  the  census 
of  1890  over  85  per  cent,  of  the  male  and  96  per  cent,  of  the 
female  colored  population  in  the  United  States  were  engaged 
in  agriculture  and  domestic  service.  The  question  of  the 
efficiency  of  this  labor  is  therefore  a  vital  one  for  the 
South.  Is  the  negro  as  efficient  a  worker  as  the  white 
man  under  the  same  conditions?  Is  his  labor  improving? 
The  mass  of  testimony  on  both  these  points  is  in  the  negative, 
although  there  is,  it  must  be  admitted,  great  diversity  of 
opinion.  As  the  industries  of  the  South  become  more  diversified, 
the  negro  seems  to  lack  the  energy  and  intelligence  to  occupy 
the  new  positions.  In  agriculture  he  has  confined  himself 
almost  exclusively  to  the  cultivation  of  cotton  (70.5  per  cent, 
of  negro  farms  raised  cotton  as  the  principal  source  of  income 
in  1900,  against  10.9  per  cent,  of  similar  farms  cultivated  by 
whites).  Even  the  special  skill  that  was  possessed  by  many 
negro  agricultural  laborers,  w^ho  had  received  their  training 
under  slavery,  in  cotton,  tobacco,  and  rice  culture,  has  been 
lost  by  the  present  generation.  There  has  thus  been  a  real 
loss  in  the  industrial  efficiency  of  negro  labor:  the  skilled 
laborer  has  become  an  unskilled  one.  On  this  point  Mr. 
Booker  T.  Washington  says:  ^  '^  I  do  not  mean  to  say  that  all 
skilled  labor  has  been  taken  out  of  the  negroes'  hands;  but  I  do 

1  Future  of  the  American  Negro,  p.  78. 
30 


450       ECOXOMIC    HISTORY    OF    THE    UNITED    STATES 

mean  to  say  that  in  no  part  of  the  South  is  he  so  strong  in  the 
matter  of  skilled  labor  as  he  was  twent}'  years  ago." 

Vigorous  efforts,  led  by  Mr.  Washington  himself,  are  now 
being  made  in  the  South  to  educate  the  negro  along  lines  of 
industrial  efficiency  and  to  make  him  a  more  reliable  and  com- 


Copyright  by  Underwood  and  Underwood. 

Chh.dhk.x  at  Wokk  in  South  Carolina  Cotton  Mills 
Children  under  ten  years  of  age  are  frequently  found  in  the  southern 
cotton  nulls.  In  this  great  spinning  room,  with  over  100,000  spindles 
in  operation,  several  yovuig  l)()ys  may  l)e  seen  carrying  the  hobhins 
upon  which  the  yarn  is  sj)un,  and  helping  to  tend  the  machines. 
One  operative  can  tend  two  of  these  machines,  which  contains  a 
large  number  of  spindles  and  spins  hundreds  of  threads  at  once. 


potent  laborer.  Encouraging  as  are  the  results,  it  is  manifest 
t  liat  any  siicli  work  of  improvement  must  be  slow  and  laborious. 
W'itliin  recent  years  there  has  been  a  considerable  influx  into 
the  southern  States  of  immigrants,  notably  Italians,  who  are 
su|)plyiiig  an  increasing  share  of  the  labor  needed  in  the  in- 


LABOR    AND    LABOR   ORGANIZATIONS  451 

dustrial  regeneration  of  that  section,  and  are  even  competing 
with  the  negro  in  the  cotton  fields.  The  native  white  popula- 
tion has  supplied  most  of  the  labor  required  by  the  new  cotton 
factories,  steel  mills,  etc.,  in  which,  owing  to  the  lack  of  re- 
strictive factory  legislation,  many  of  the  abuses  attendant 
upon  the  early  growth  of  the  factory  system  elsewhere  are 
being  reproduced. 

SUGGESTIVE  TOPICS  AND  QUESTIONS.     CHAPTER   XXIX 

1.  Explain  the  gi'owth  of  cities  in  the  United  States.  Is  the  move- 
ment true  of  other  countries?  [A.  F.  Weber,  The  Growth  of  Cities;  Shaw, 
Mun.  Gov't  in  Great  Britain,  2-17;  Strong,  The  New  Era,  188-197;  Bhss, 
Encycl.  of  Social  Reform,  art.,  City  and  Social  Reform.] 

2.  Compare  the  racial  composition  of  the  population  in  an  important 
manufacturing  city  to-day  with  that  of  twenty-five  or  fifty  years  ago. 
[Census  volumes  on  Population.] 

3.  What  proportion  of  our  illiterate,  criminal,  or  otherwise  undesirable 
population  is  composed  of  foreign-born?  [Adams  and  Sumner,  89;  Mayo- 
Smith,  chap.  8;  Hall,  Immigration,  chaps.  5,  8;  Rep.  Ind.  Com.,  XV,  285- 
292.] 

4.  Do  you  think  immigration  should  be  restricted?  Why?  [Rep. 
U.  S.  Com'r  of  Immigration;  Mayo-Smith,  chap.  12;  Hall,  part  3,  chaps. 
10-14;  Bliss,  Encycl.  of  Soc.  Ref.,  art.  Immigration;  Croswell,  Should 
Immigration  be  Restricted?  in  No.  Amer.  Rev.,  May,  1897.] 

5.  Should  the  Chinese  restriction  law  be  repealed?  [Rep.  Ind.  Com., 
X,  747-802;  Hall,  chap.  15;  Foster,  Amer.  Dipl.  m  the  Orient,  chap.  8.] 

6.  Describe  the  distribution  of  the  important  races  in  the  United 
States.  Why  have  they  settled  where  they  are?  [Rep.  Ind.  Com.,  XV, 
492-616;  Wright,  Practical  Sociology,  56-59;  Hall,  88-95;  Willcox,  The 
Distribution  of  Immigration  in  the  U.  S.,  in  Quart.  Journ.  of  Econ.,  XX, 
523  (Aug.,  1906).] 

7.  Describe  the  conditions  in  the  slums  of  one  of  our  large  cities. 
[Rep.  Ind.  Com.,  XV,  449-492;  7th  Spec.  Rep.  of  U.  S.  Dept.  of  Labor; 
Hull  House  Maps  and  Papers;  Bogart,  Housing  of  the  Working  People 
in  Yonkers,  in  Economic  Studies,  vol.  3,  no.  5.] 

8.  Has  the  mixture  of  races  through  foreign  immigration  been  a  source 
of  strength  or  weakness  to  the  American  nation?  [Mayo-Smith,  chap.  8; 
Hall,  98,  172;  Rep.  Ind.  Com.,  XV,  304-316;  Fisher,  Alien  Degradation  of 
Amer.  Character,  in  Forum,  XIV.  608-615.] 

9.  What  further  labor  legislation,  if  any,  should  be  passed  in  the 
United  States?     [J.  G.  Brooks,  The  Social  Unrest,  chap.  12.] 


452       ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

10.  Do  you  approve  of  trade  unions?  Why?  [Oilman,  Methods  of  Ind. 
Peace,  chap.  7;  Mitchell,  Org.  Lab.,  chaps.  17,  19;  Bullock,  Intro.,  432-441; 
Seager,  Intro.,  386;  Bliss,  Encycl.  of  Soc.  Ref.,  art.  Trade  Unions,  IV,  V.] 

11.  Is  a  labor  union  a  monopoly?  [Seager,  Intro.,  406-8;  Bogart, 
Chicago  Building  Trades  Conflict,  in  Pol.  Sci.  Quart.,  XVI,  121;  also  in 
Commons,  Trade  Unionism  and  Labor  Problems,  94.] 

12.  Should  trade  unions  be  incorporated?  [Oilman,  chap.  6;  Mitchell, 
chap.  26;  Adams  and  Sumner,  271-279.] 

13.  What  should  be  the  attitude  of  strikers  to  non-union  men  who 
are  willing  to  take  their  positions?     [Oilman,  420;  Mitchell,  chap.  32.] 

14.  Do  you  approve  of  the  open  or  closed  shop?  [White,  et  al.,  in 
Publ.  Amer.  Econ.  Ass.,  3d  Series,  IV.  173  ff.;  Rep.  Ind.  Com.,  VII,  715- 
722;  V.  S.  Yarros,  in  Rev.  of  Rev.,  XXXI,  589.] 

15.  Describe  more  fully  the  American  Federation  of  Labor.  [Wright, 
Ind.  Evol.,  chap.  20;  Rep.  Ind.  Com.,  VII,  108-9,  420-440;  Levasseur,  20a- 
211;  Aldrich,  Amer.  Fed.  of  Lab.,  in  Econ.  Studies  of  Amer.  Econ.  Ass., 
vol.  3,  no.  4.] 

16.  If  a  universal  eight-hour  day  were  introduced,  would  there  be 
more  work  for  the  unemployed?  [Rae,  Eight  Hours  for  Work;  Ounton, 
Wealth  and  Progress;  Rae  in  Econ.  Journ.,  vol.  1;  Walker,  in  Atl.  Mo., 
June,  1890.] 

17.  Are  strikes  necessary?  Do  they  pay?  [Rep.  Ind.  Com.,  XVII,  Ixii, 
Adams  and  Sumner,  206;  Seager,  Intro.,  398;  Sumner,  Do  We  Want  In- 
dustrial Peace,  in  Forum,  VIII,  406-416;  F.  H.  Foster,  Trade  Union  Ideals, 
in  Publ.  Amer.  Econ.  Ass.,  3d  Series,  IV,  17^-210.] 

18.  What  is  meant  by  a  boycott?  A  lockout?  The  sympathetic 
strike?  Do  you  approve  of  these  methods  of  conducting  an  industrial 
dispute?  [F.  S.  Hall,  Sympathetic  Strikes  and  Sympathetic  Lockouts; 
Mitchell,  Org.  Labor,  chap.  33;  Adams  and  Sumner,  175;  Levasseur,  237- 
240.  250-257.] 

19.  Describe  compulsory  arbitration  in  New  Zealand.  [Oilman, 
chap.  14;  Lloyd,  A  Country  without  Strikes;  Adams  and  Sumner,  319-325; 
Rep.  Ind.  Com.,  XVII,  519-539.] 

20.  Describe  the  work  done  at  Tuskegee  Institute.  [B.  T.  Wash- 
ington, The  Successful  Training  of  the  Negro,  in  World's  Work,  Aug.,  1903.] 

SELECTED  REFERENCES.     CHAPTER   XXI-X 

**Adums  and  Sumner:  Labor  Problems,  chaps.  3,  6-8,  12,  13. 
♦Commons  (Ed.):  Trade  I'nionism  and  Labor  Problems. 
*Hall:  Immigration. 

** Industrial  Commission  Reports,  vols.  5,  8,  12,  14,  15,  17,  19. 

♦Jeans  (Ed.):  Report  of  British  Iron  Trade  Commission,  54-73. 
**Leva.sseur:  The  American  Workman. 


LABOR   AND    LABOR    ORGANIZATIONS  453 

Exhibit  of  the  U.  S.  Bureau  of  Labor  at  the  Louisiana  Purchase 

Exposition.     Bulletin  of  U.  S.  Dept.  of  Labor,  Sept.,  1904,  no.  54. 

Gilman:  Methods  of  Industrial  Peace. 

Leroy-Beauheu :  The  United  States  in  the  Twentieth  Century,  part  1, 
chaps.  2-4. 

Mitchell:  Organized  Labor,  chaps.  3,  4,  9-11,  46-51. 

Mosely  Industrial  Commission  Report. 

Murphy:  Problems  of  the  Present  SoutL,  chaps.  4,  5. 


CHAPTER   XXX 

COMMERCIAL   EXPANSION.     CONCLUSION 

369.  Growth  of  the  foreign  trade  of  the  United  States.  —  No 

phase  of  its  industrial  development  has  attracted  more  atten- 
tion or  serves  as  a  better  index  of  its  marvelous  economic 
expansion  than  the  growth  of  the  foreign  trade  of  the  United 
States.  The  advance  of  this  country  as  an  exporting  nation 
from  fourth  place  in  1880  to  the  front  rank  in  all  the  world  in 
1900  called  attention  to  the  advance  which  had  taken  place 
in  our  productive  power  and  suggested  the  possibility  of  fur- 
ther changes  in  the  movement  of  the  world's  trade.  Until 
recently  the  people  of  the  United  States  were  occupied  with 
the  task  of  appropriating  and  developing  the  resources  of  the 
country,  and,  like  all  new  countries,  purchased  more  than 
they  sold,  running  heavily  into  debt  for  supplies  of  capital  and 
manufactured  goods.  This  period  may  be  said  to  have  ended 
in  1876;  up  to  that  time  in  only  three  years  —  1858,  1862,  and 
1874  —  had  the  exports  exceeded  the  imports,  while  since  that 
date  they  have  fallen  behind  in  only  three  years  —  1888,  1889, 
and  1893.  During  the  first  century  of  our  national  existence 
our  exports  were  chiefly  of  agricultural  products;  the  last  three 
decades,  and  particularly  the  last  ten  years,  have  seen  a  great 
growth  in  exports  of  manufactures.  The  table  on  page  455 
presents  the  most  important  facts  relating  to  our  foreign 
trade. 

370.  Exports.  —  Although  the  extractive  industries  still 
furnish  nearly  two  thirds  and  agriculture  alone  over  one  half 
of  the  domestic  exports  of  the  United  States,  the  characteristic 
phenomenon  of  the  recent  export  movement  has  been  the 
increase   in   the   pr()]X)rtion  of  manufactures.     It   seems   clear 

454 


COMMERCIAL    EXPANSION 


455 


Foreign  Trade  of  the  United  States 
(in  millions  of  dollars) 


Year 

Domestic 

Exports  of 

Merchan- 

Imports of 
Merchan- 

Total Ex- 
ports  and 
Imports 

Percentage 
which  Agri- 
cultural 
Products 

Percentage 
which  Manu- 
factures 

dise 

dise 

(including 
Re-exports) 

formed  of 
Total 

formed  of 
Total 

1790 

20.2 



_ 

_ 

6.1 

1800 

31.8 

91.2 

162.2 

80.4 

7.8 

1810 

42.3 

85.4 

152.1 

78.9 

9.3 

1820 

51.6 

74.4 

144.1 

80.6 

7.5 

.  1830 

58.5 

62.7 

134.4 

80.3 

11.3 

1840 

111.6 

98.2 

221.9 

82.8 

9.9 

1850 

134.9 

173.5 

317.8 

80.5 

13.0 

1860 

316.2 

353.6 

687.2 

81.1 

12.7 

1870 

376.6 

435.9 

828.7 

79.3 

15.0 

1880 

823.9 

667.9 

1,503.6 

83.2 

12.5 

1890 

845.2 

789.3 

1,647.1 

74.5 

17.8 

1900 

1,370.7 

849.9 

2,244.4 

60.9 

31.6 

1901 

1,460.4 

823.1 

2,310.9 

64.6 

28.1 

1902 

1,355.4 

903.3 

2,285.0 

62.8 

29.8 

1903 

1,392.2 

1,025.7 

2,445.8 

62.7 

29.3 

1904 

1,435.1 

991.0 

2,451.9 

59.5 

31.5 

1905 

1,491.7 

1,117.5 

2,636.1 

54.1 

35.8 

that  the  country  has  at  last  reached  a  stage  in  its  economic 
development  where  it  can  compete  on  equal  terms  with  the 
older  nations  of  Europe.  Of  the  six  articles  which  supply  the 
chief  requisites  for  manufacturing  —  coal,  iron,  copper,  wood, 
cotton,  and  wool  —  the  United  States  is  the  largest  producer 
of  all  but  the  last,  and  is  therefore  admirably  equipped  for 
manufacturing  a  great  variety  of  commodities.  About  80 
per  cent,  of  the  manufactures  exported  consist  of  the  following 
ten  articles,  in  the  order  of  importance:  iron  and  steel  manu- 
factures, petroleum,  copper,  cotton  manufactures,  leather  and 
its    manufactures,    agricultural    implements,    chemicals,    wood 


456      ECONOMIC    HISTORY    OF    THE    UNITED    STATES 

manufactures,  paraffin,  paper  and  its  manufactures.  While 
some  of  the  articles  involve  very  Utile  change  from  the  crude 
state,  as  petroleum,  leather,  and  wood  manufactures,  the  others 
represent  a  large  labor  cost,  as  manufactures  of  iron  and  steel, 
which    includes    tools,    sewing    machines,    locomotives,    type- 


Ax  Americax  Reaper  ix  Russia 
Notice  the  contrast  between  the  modem  reaper  and  the  primitive, 
clumsj^  harness  and  shafts.     In  southeastern  Russia   camels  are 
largely  used  as  l^easts  of  draft  and  burden. 

writers,  and  other  articles  requiring  special  skill  or  mechanical 
genius,  as  .electrical  apparatus  (copper  manufactures).  In  the 
exportation  of  iron  and  steel  particularly,  for  whose  production 
the  United  States  is  so  pre-eminently  fitted,  we  may  exj^ect  to 
see  a  great  growth  in  the  future. 

371.  Imports.  —  The  growth  in  our  foreign  trade  has  not 
been  confined  entirely  to  the  increased  exports.  As  we  have 
produced  more  and  become  richer  we  have  at  the  same  time 
become  better  customers  of  other  countries,  and  have  imported 
more  freely.  But  the  character  of  the  imports  into  the  United 
States  serves  after  all  to  give  additional  proof  of  the  develop- 


COMMERCIAL    EXPANSION  457 

ment  of  American  manufactures,  almost  all  the  increase  be- 
ing confined  to  manufacturers'  materials,  which  make  up  45 
per  cent,  of  the  total,  and  to  luxuries.  We  import,  in  other 
words,  either  the  raw  materials  or  partly  manufactured  goods 
for  use  in  manufactures  and  the  mechanic  arts,  or  those  things 
which  we  cannot  produce  at  home. 

After  deducting  the  imports  from  the  exports  there  remains 
a  '^favorable  trade  balance"  to  our  credit  of  over  $450,000,000 
a  year  on  the  average  for  the  last  five  3Tars;  this  large  excess 
of  exports  has  been  characteristic  of  our  foreign  trade  since 
1876.  and  is  usually  regarded  as  an  indication  of  national  pros- 
perity. But  it  must  be  remembered  that  there  are  several  im- 
portant items  which  do  not  appear  on  the  merchandise  balance 
sheet,  but  which  materially  offset  this  excess.  The  domestic 
cost  of  the  imports  is  much  greater  than  it  appears  to  be,  for 
no  allowance  is  made  in  these  statistics  for  undervaluation, 
tariff  duties,  commissions,  profits  of  importers,  etc.  In  the 
second  place,  a  large  amount  of  our  merchandise  exports  goes 
to  pay  for  the  expenditures  of  American  travelers  abroad,  the 
interest  on  foreign  capital  invested  in  this  country,  payments 
to  foreign  shipowners  for  carrying  our  freights,  and  other 
similar  expenses.  But  even  after  these  deductions  are  made 
there  remains  a  considerable  annual  balance  in  our  favor, 
which  is  steadily  being  applied  to  the  reduction  of  our  foreign 
indebtedness. 

372.  Commercial  expansion.  —  The  enormous  expansion  of 
the  export  trade  of  the  United  States  in  1900  and  1901  almost 
created  a  panic  among  European  manufacturers,  who  viewed 
with  alarm  this  ''  American  invasion."  And  indeed  the  in- 
crease was  startling:  the  excess  of  exports  over  imports  grew 
from  56  million  dollars  in  1890  to  520  million  in  1900  and 
637  in  1901.  Their  fears  have  since  somewhat  lessened,  as  the 
great  wave  of  those  exceptional  years  has  slightly  subsided, 
but  we  may  expect  that  in  the  future  exports,  and  especially  of 
manufactured  goods,  will  remain  permanently  on  a  higher  level 
than  in  former  years. 


18' 
4400 


4000 


1881 


YEARS     1891 


1901 


2800 


■2400 


2000 


1600 


1200 


800 


400 


/ 

/ 

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CO 
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< 

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CO 

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o 

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___ 

A 

^-^ 

FFiANCE 

ONS      OF  DC 

\ 

^ 

I- 
> 

^''>' 

/y 

CHART  SHOWING  THE 

COMMERCIAL   EXPANSION  OF 

THE  FOUR   PRINCIPAL  NATIONS, 

1871-1906. 

1906 
4400 


4000 


3600 


3200 


2800 


2100 


2000 


IGOO 


1200 


400 


1871 


1881     YEARS     1891 


.1901 


1906 


COMMERCIAL    EXPANSION  459 

Certain  changes  of  recent  occurrence  have  given  the  United 
States  a  more  commanding  position  in  the  world's  markets, 
especially  in  the  Orient,  which  will  undoubtedly  further  our 
commercial  expansion.  These  are  the  acquisition  of  the 
Philippines  as  a  trading  base,  the  completion  of  the  Trans- 
Siberian  railroad,  the  industrial  awakening  of  Japan  and 
China,  thebuilding  of  the  Panama  Canal  by  the  United  States, 
and  the  more  energetic  efforts  to  secure  foreign  markets  for 
the  growing  surplus  of  American  manufactures.  On  the  other 
hand,  with  all  our  natural  advantages,  we  are  handicapped  in 
our  competition  with  European  rivals  by  our  failure  to  adapt 
ourselves  to  the  prejudices  of  foreign  customers,  by  our  back- 
wardness in  commercial  and  technical  education,  and  by  our 
restrictive  tariff  policy. 

At  the  same  time,  this  expansion  of  our  foreign  trade  has 
been  accompanied  by  a  shifting  in  the  center  of  the  export 
movement.  ^Yhile  New  York  easily  retains  her  commercial 
supremacy  as  a  trading-port  there  has  been  a  decline  in  the 
proportion  of  exports  shipped  from  Atlantic  ports,  from  75 
per  cent,  in  1894  to  61  per  cent,  in  1904.  Most  of  this  loss  has 
gone  to  the  Gulf  ports,  whose  exports  grew  during  the  same 
period  from  14  to  23  per  cent,  of  the  whole;  the  ports  on  the 
Great  Lakes  and  Canadian  border  also  showed  a  considerable 
gain.  These  facts  indicate  increased  transportation  facilities 
from  every  section  of  the  country,  which  may  be  expected  to 
increase  in  the  same  direction  with  the  completion  of  the 
Panama  Canal. 

373.  The  domestic  commerce  of  the  United  States.  —  "  Vast 
as  our  foreign  commerce  has  become  in  recent  years,  it  is  far 
exceeded  in  value  and  volume  by  our  internal  trade.  The 
value  of  our  domestic  commerce  is  about  thirteen  times  that 
of  our  foreign  commerce,  or  about  $28,000,000,000.  The 
volume  of  goods  exchanged  is  about  twenty-four  times  that 
of  our  foreign  exchanges."  ^  Only  about  7  per  cent,  of  the 
value  of  the  products  of  the  United  States  in  1900  were  exported, 
^  Wel)ster,  General  Histoiy  of  Commerce,  p.  440. 


460      ECONOMIC    HISTORY    OF    THE    UNITED   STATES 

the  rest  being  exchanged  or  consumed  at  home;  the  exports 
amounted  to  only  SIS  per  capita.  However  we  look  at  it, 
it  is  evident  that  our  domestic  commerce  is  very  much  more 
important  than  our  foreign  trade,  although  the  latter  attracts 
greater  attention.  The  importance  of  domestic  commercial 
movements  is  shown  by  a  few  facts:  for  the  fiscal  year  ending 
June  30,  1904,  over  28,000,000  freight  cars  were  used  on  our 
railroads  for  the  transportation  of  commodities;  the  receipts 
of  live  stock  at  five  western  points  were  34,500.000  head;  the 
domestic  lake  traffic  amounted  to  44,000,000  tons,  the  ship- 
ments of  coal  from  Atlantic  ports  to  coastwise  destinations, 
which  is  the  most  important  item  in  the  coastwise  trade, 
were  30,700.000  tons.  The  main  currents  of  internal  com- 
merce, especially  of  grain,  coal,  lumber,  and  cotton,  are 
yearly  being  subjected  to  more  complete  statistical  measure- 
ment; in  general  these  are  from  west  to  east,  while  there  is  a 
corresponding  movement  from  east  to  west  of  manufactured 
goods. 

374.  The  concentration  of  wealth.  —  Before  concluding  this 
survey  of  the  industrial  development  of  the  United  States,  it 
is  desirable  to  ascertain  if  possible  to  whom  this  vast  increase 
of  wealth  is  going.  Equality  of  conditions  and  the  wide 
diffusion  of  wealth  have  long  been  the  boast  of  our  Republic; 
are  they  less  true  to-day  than  they  were  fifty  or  one  hundred 
years  ago?  In  the  half  century,  1850-1904,  the  per  capita 
value  of  all  property  in  the  country  has  exactly  quadrupled; 
how  has  this  been  distributed?  While  no  absolutely  exact 
statistics  exist  on  this  subject,  yet  reliable  estimates  by  scien- 
tific students  all  tell  the  same  story  —  of  great  concentration 
of  wealth  in  the  hands  of  a  few  of  the  richest  families.  The 
character  of  the  changes  which  have  taken  place  in  the  last 
seventy-five  years  is  perhaps  best  shown  in  the  following  study 
of  probated  estates  in  Massachusetts,  made  by  the  State  Bureau 
of  Statistics  of  Labor: 


COMMERCIAL    EXPANSION 


461 


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462      ECONOMIC   HISTORY    OF    THE    UNITED   STATES 

These  figures  show  not  merely  that  an  astonishingly  large 
proportion  of  the  total  wealth  is  in  the  hands  of  the  very  rich, 
but  that  this  proportion  has  greatly  increased.  In  1893  Mr. 
George  K.  Holmes  estimated  from  a  study  of  the  statistics  of 
farm  and  home  ownership  in  the  United  States  in  1890  that 
''  91  per  cent,  of  the  families  of  the  country  own  no  more  than 
about  29  per  cent,  of  the  wealth,  and  9  per  cent,  of  the  families 
own  about  71  per  cent,  of  the  wealth."  The  great  fortunes  of 
the  United  States  have  been  made  possible  by  the  unrivaled 
opportunities  for  the  exploitation  of  natural  resources,  the 
appropriation  of  natural  monopolies,  and  the  development  of 
new  lines  of  trade  and  manufactures.  The  capital  requisite 
for  the  prosecution  of  these  industries  has  been  accumulated 
for  the  most  part  by  those  already  rich;  the  great  mass  of  the 
w^orkers  has  preferred  to  raise  their  standard  of  living  by  spend- 
ing rather  than  to  accumulate  wealth  by  saving.  There  is 
danger,  however,  that  the  concentration  of  wealth  under  the 
ownership  and  control  of  the  few  may  go  too  far,  and  threaten 
the  very  stability  of  our  democratic  government.  The  surest 
safeguard  against  these  dangers  lies  in  keeping  open  the  door 
of  opportunity  to  all  alike,  and  providing  for  general  education 
and  the  prohibition  of  all  special  privileges. 

375.  Summary:  The  colonial  period.  —  The  New  World 
seems  to  have  been  reserved  in  all  its  wonderful  richness  of 
undeveloped  resources,  for  settlement  by  the  Anglo-Saxon  race. 
The  aborigines  who  w^ere  found  in  the  country  at  the  first 
coming  of  the  white  man  had  not  advanced  far  enough  in 
civilization  to  exploit  the  mineral  or  agricultural  wealth,  but 
subsisted  largely  by  the  chase  or  by  a  primitive  agriculture 
which  barely  scratched  the  surface  of  the  soil.  Although  other 
nations  were  first  on  the  scene  they  finally  yielded  the  title  to 
the  continent  of  North  America  to  the  English.  The  motives 
which  sent  the  early  colonists  to  these  shores  were  effective  in 
selecting  the  most  venturesome,  energetic,  and  liberty-loving 
for  the  work  of  settlement.  During  the  colonial  period  the  work 
of   the   colonists  was   a   constant   struggle   with   nature,   the 


COMMERCIAL   EXPANSION  463 

hewing  of  homes  out  of  the  forest,  and  the  development  of  the 
wilderness.  The  industries  of  the  colonists  were  determined 
largely  by  their  environment  and  were  scarcely  a  matter  of 
choice;  agriculture  was  of  necessity  the  most  important  single 
industry,  supplemented  in  New  England  and  the  Middle  colonies 
by  fishing  and  commerce.  While  manufactures  were  early  at- 
tempted they  were  never  developed  far.  Partly  responsible  for 
this  was  the  restrictive  commercial  policy  of  England  toward 
the  colonies,  which  made  their  interests  entirely  subordinate 
to  those  of  the  mother  country. 

Although  the  work  of  the  colonists  involved  unremitting 
toil  and  hard  conditions,  they  were  never  carried  away  by 
materialism.  From  the  beginning  the  American  people  has 
had  ideals  and  has  sought  earnestly  to  realize  them.  They 
have  not  been  swept  on  blindly  by  the  forces  of  nature,  but 
have  deliberately  sought  to  realize  certain  political,  social,  and 
economic  ideals.  In  the  simple  conditions  of  an  undeveloped 
agricultural  community  their  realization  seemed  compara- 
tively easy.  While  the  accumulation  of  wealth  was  as  yet 
slight,  it  was  distributed  fairly  equally,  and  poverty  was  almost 
unknown.  There  was  abundant  opportunity  for  all  who 
would  exert  themselves,  and  to  labor  itself  there  attached  no 
social  stigma.  Wide-spread  economic  well-being  characterized 
the  end  of  the  period. 

376.  Summary:  The  struggle  for  freedom.  —  The  colonial 
period  was  brought  to  a  close  by  the  revolt  of  the  colonies  against 
the  burdensome  financial  and  economic  policy  of  England. 
Political  independence,  however,  was  not  followed  immediately 
by  either  commercial  or  economic  independence.  Another  war 
was  necessary  before  the  first  was  secured,  while  the  second  can 
hardly  be  said  to  have  been  attained  until  the  second  quarter 
of  the  nineteenth  century.  The  economic  development  of  the 
country  after  the  Revolution  followed  in  the  main  the  same 
course  which  had  characterized  it  before.  During  this  period 
the  carrying  trade  was  developed  to  an  extraordinary  degree, 
while  the  foreign  demand  for  our  agricultural  staples  also  gave 


464      ECONOMIC    HISTORY    OF    THE    UNITED   STATES 

a  great  stimulus  to  agriculture.  A  beginning  was  made  in 
manufactures,  but  these  industries  were  confined  as  yet  to  the 
household.  As  during  the  colonial  period,  so  also  during 
the  thirty  years  following  the  Declaration  of  Independence, 
the  economic  policy  of  the  new  States  and  later  of  the  Union 
was  largely  dependent  upon  that  of  England  and  of  Europe. 
The  face  of  the  American  people  was  turned  to  the  Atlantic 
and  their  gaze  was  directed  across  it.  From  this  colonial 
attitude  they  were  first  rudely  shaken  by  the  Embargo  and 
later  by  the  War  of  1812,  which  mark  an  important  industrial 
transition  in  the  economic  life  of  the  nation. 

377.  Summary:  The  westward  movement.  —  The  restrictive 
period  inaugurated  by  the  Embargo,  during  which  foreign 
intercourse  was  almost  completely  cut  off,  introduced  an 
industrial  revolution  which  gradually  transferred  the  textile 
and  other  manufacturing  industries  from  the  household  to  the 
factory.  By  the  time  of  the  Civil  War  the  transition  had  been 
almost  completely  accomplished.  More  significant,  however, 
and  more  important  in  the  life  of  the  growing  nation,  was  the 
westward  movement  of  the  population.  The  great  task  of 
the  American  people,  of  appropriating  and  settling  the  vast 
territory  to  the  west  of  the  Alleghanies,  was  now  undertaken 
on  a  large  scale.  Hand  in  hand  with  the  westward  movement, 
as  a  part  of  it,  went  the  exploitation  of  the  undeveloped  re- 
sources of  the  country,  the  expansion  and  improvement  of 
agriculture,  and  above  all,  the  development  of  improved 
means  of  transportation  and  communication. 

This  period  marks  the  emergence  of  a  strong  national  feeling. 
For  the  first  time  the  American  people  turned  their  back  on 
the  Atlantic  and  developed  a  commercial  policy  which  looked 
to  economic  as  well  as  political  independence  of  Europe.  The 
Monroe  Doctrine  was  simply  the  political  statement  of  the 
economic  situation  and  policy.  The  problems  of  this  period 
were  internal  and  domestic:  the  disposition  of  the  public  lands, 
the  encouragement  of  internal  improvements,  the  protection 
of  manufactures,  the  building  up  of  the  merchant  marine,  and 


COMMERCIAL    EXPANSION  465 

above  all,  the  question  of  slavery.  The  material  prosperity 
of  the  country  and  the  growing  economic  integration  of  the 
different  sections  were  threatened  by  the  existence  of  this 
institution.  The  dictum  of  Lincoln,  that  "  this  country  cannot 
endure  half  slave  and  half  free,"  w'as  as  true  economically  as 
it  was  politically.  The  unwillingness  of  the  people  to  permit 
the  further  extension  of  slavery  led  finally  to  the  Civil  War 
and  to  the  abolition  of  the  institution. 

As  a  whole  the  period  was  one  of  marvelous  material  ex- 
pansion and  prosperity.  The  prodigality  of  nature,  the  big- 
ness of  the  country,  and  the  character  of  their  work,  led  to  the 
exhibition  of  some  of  the  less  desirable  traits  of  the  American 
people.  But,  while  their  manners  were  often  rude,  the  heart 
and  conscience  of  the  nation  were  right.  Economic  well-being 
was  wide-spread  and  poverty  unknown  outside  of  the  larger 
cities,  but  already  complaints  were  heard  of  labor  troubles,  of 
the  increasing  power  of  monopolies  and  corporations,  and  of 
the  growing  concentration  of  wealth. 

378.  Conclusion :  The  rise  of  industrialism.  —  The  conclu- 
sion of  the  Civil  War  found  the  different  sections  of  the  country 
in  different  stages  of  economic  development  and  confronted 
with  varying  problems.  The  South  was  left  with  a  peculiar 
problem  of  its  own.  A  new  generation  of  free  laborers  had  to 
be  trained  up  to  take  the  place  of  the  former  slaves.  That, 
and  the  exploitation  of  the  untouched  natural  wealth  of  this 
section,  is  the  task  of  the  South,  upon  whose  solution  she  is 
now  entering  with  the  vigor  of  a  young  people.  In  the  West, 
the  free  land  has  been  practically  all  taken  up,  and  the  future 
will  probably  see  there  the  application  of  a  more  intensive 
agriculture,  and  the  slow,  steady,  non-dramatic  extension  of 
other  interests  —  the  growth  of  the  population,  of  cities,  and 
of  manufacturing  industries. 

The  industrial  development  of  the  Central  and  Eastern 
States  is  already  far  advanced,  and  with  this  growling  indus- 
trialism have  emerged  numerous  problems.  The  transference 
of  manufactures  from  the  household  to  the  factory  has  been 
31 


466      ECONOMIC    HISTORY    OF    THE    VMTED    STATES 

completely  effected,  and  the  factory  has  grown  in  size  and 
complexity.  Large-scale  production  characterizes  the  manu- 
factures, transportation,  and  distribution  of  most  of  the  prod- 
ucts of  the  country.  With  the  expansion  of  industry  beyond 
the  limits  of  a  local  market,  its  organization  on  a  larger  scale 
became  imj^erative.  The  formation  of  corporations  and  trusts 
has  been  one  answer  to  this  demand;  the  trust  is  a  temporary 
form,  but  the  organization  of  capital  in  larger  masses  is  a  per- 
manent result  of  this  movement.  Association  and  cooperation 
are  types  of  an  advanced  stage  of  economic  development,  and 
it  is  highly  desirable  that  the  benefits  of  these  should  be  secured, 
while  avoiding  the  evils  of  monopoly.  Hand  in  hand  with  the 
organization  of  capital  has  gone  that  of  labor.  The  organiza- 
tion of  industry  on  a  large  scale,  with  expensive  machinery, 
has  resulted  in  the  growth  of  a  wage-earning  class;  these  work- 
ers have  organized  on  a  national  scale,  and  enforced  their 
demands  with  fairly  steady  success.  The  changed  character 
of  immigration  has  complicated  the  labor  situation,  and  has 
brought  the  question  of  its  further  restriction  to  the  front. 

Having  settled  the  most  pressing  domestic  problems  result- 
ing from  the  Civil  War,  the  country  has  now  directed  its  atten- 
tion to  the  invasion  of  European  markets.  The  industrial 
development  of  the  country  has  been  such  as  to  permit  not 
merely  the  satisfaction  of  domestic  needs,  but  also  the  expor- 
tation, of  surplus  manufactured  goods.  Again  the  American 
people  may  be  said  to  have  faced  the  Atlantic  and  directed 
their  gaze  toward  Europe;  the  near  future  will  undoubtedly 
see  a  change  in  their  commercial  policy  corresponding  to  this 
altered  economic  attitude. 

379.  Conclusion:  Economic  integration.  —  The  al)olition  of 
slavery  permitted  harmonious  economic  cooperation  between 
the  different  sections  of  the  country;  and  the  last  quarter  cen- 
tury has  seen  rapid  progress  toward  the  complete  industrial 
integration  of  the  whole  country.  As  interests  have  become 
larger,  sectional  divergencies  have  been  lost  in  the  growing 
unity  of  the  greater  whole.     With  the  growth  of  the  transporta- 


COMMERCIAL    EXPANSION  467 

tion  system  and  the  expansion  of  the  population,  industries 
have  outgrown  the  narrow  limits  of  local  communities  and  even 
States  or  sections,  and  have  become  national  in  scope  and 
importance.  The  problems  have  therefore  been  shifted  largely 
from  the  local  to  the  national  arena,  and  the  agencies  of  control 
have  necessarily  become  those  of  the  Federal  government. 
Never  before  was  the  question  of  governmental  regulation  of 
private  industries  more  important.  True  economic  freedom,  the 
ecjual  opportunity  of  all  in  the  race  for  wealth,  can  be  secured 
only  by  the  enforcement  of  law  and  conservative  control. 
While  an  unrestrained  policy  of  laissez  faire  has  permitted  the 
growth  of  some  undesirable  features  in  the  political,  social,  and 
economic  organism,  there  are  many  and  hopeful  indications  at 
present  not  merely  of  the  recognition  of  the  need  of  public 
regulation,  but  of  its  actual  application.  There  is  also  a  grow- 
ing sense  of  responsibility  on  the  part  of  the  average  citizen 
and  man  of  wealth.  The  great  problem  of  the  present  in  the 
United  States  is  no  longer  that  of  appropriating  the  natural 
resources,  but  of  wisely  using  and  administering  the  great 
wealth  of' the  country  by  those  in  whose  ownership  it  rests. 

There  has  been  an  enormous  increase  of  wealth  during  this 
period,  but  there  has  been  also  a  disproportionate  concentration 
of  wealth  in  the  hands  of  a  few.  Old  World  problems  of 
poverty  —  from  which  we  had  hoped  we  were  happily  free  — 
have  emerged  in  our  cities,  where  destitution  and  vi'^e  have 
been  localized  and  brought  before  the  public  gaze.  On  the 
whole,  however,  the  present  probably  sees  as  wide  and  general 
a  diffusion  of  plenty  as  any  previous  time  in  our  national 
history.  The  future  holds  great  promise  and  also  grave  re- 
sponsibility for  the  wise  and  conservative  solution  of  these 
far-reaching  economic  problems. 

SUGGESTIVE  TOPICS   AND   QUESTIONS.     CHAPTER   XXX 

1 .  How  much  do  the  various  items  which  do  not  appear  in  the  merchan- 
dise exports  or  imports  amount  to  yearly?  What  was  the  probable  real 
l)alance  in  our  favor  in  1906?  [Bullock,  Intro.,  .332;  Gide,  294-7;  Bastable, 
Theory  of  International  Trade,  7.3-78;  Bacon  in  Yale  Rev.,  Nov.,  :900.1 


468      ECONOMIC   HISTORY    OF    THE    UNITED   STATES 

2.  The  imports  of  Great  Britain  and  of  France  are  each  year  much 
greater  than  their  exports;  are  they  running  into  debt?     [Gide,  292-8.] 

3.  AVith  what  countries  is  our  foreign  trade  the  largest?  How  do 
you  account  for  this?     [Mo.  Sum.  of  Com.  &  Fin.  —  latest  issue.] 

4.  Describe  the  method  of  settling  international  trade  balances. 
[Hobson,  Internat.  Trade,  chap.  8;  Bullock,  Intro.,  331-336;  Gide,  298- 
301;  Seager,  360  ff.] 

5.  Is  it  true  that  "trade  follows  the  flag"?  [Reinsch,  Colonial 
Government,  62.] 

6.  What  is  meant  by  a  "favorable  balance  of  trade"?  [Bliss,  Encycl. 
of  Soc.  Ref.,  art.  "Balance  of  Trade";  Bullock,  Intro.,  324.] 

7.  What  bearing  does  our  consular  service  have  on  our  foreign  trade? 
Are  our  consular  reports  of  service  to  American  manufacturers?  [C.  D. 
Warner,  Our  Foreign  Trade  and  Our  Consular  Service,  in  No.  Amer.  Rev., 
CLXII,  274.] 

8.  Would  the  people  of  the  United  States  suffer  if  they  severed  all 
connection  with  the  rest  of  the  world?  How  would  the  people  of  European 
countries  fare  if  they  did  the  same?  [Bastable,  Theory  of  Intern.  Trade, 
17-21;  Gide,  301-6.] 

9.  How  does  the  trade  of  South  America  with  the  United  States  com- 
pare with  their  trade  with  Europe?  Account  for  this.  [Mo.  Summary-  of 
Com.  and  Fin.  —  latest  number.] 

10.  Is  there  any  connection  betvN'een  the  amount  of  our  foreign  trade 
and  the  maintenance  of  a  protective  tariff?  What  effect,  if  any,  would 
its  removal  have  on  our  foreign  trade?     [Wells,  Our  Merch.  Mar.,  chap.  10.] 

11.  Account  for  the  relative  growth  in  the  foreign  trade  of  the  gulf 
ports,  and  the  decline  of  that  of  New  York  City.  [World's  Work,  VIII, 
4732  (May,  1904).] 

12.  What  was  the  cause  of  the  sudden  increase  in  exports  in  1901? 
[Lawson,  Amer.  Ind.  Probl.,  chaps.  21,  22;  Twelfth  Census,  VII,  clxiv- 
clxx;  Pop.  Sci.  Mo.,  LV.  62.] 

13.  Describe  the  "American  invasion"  of  Europe.  [Vanderlip  in  Scrib- 
ner's  Magazine,  XXXI,  3,  194,  287;  W.  T.  Stead,  The  Americanization  of 
the  World,  342-381;  Century  Mag.,  XXIX,  786;  XXXVIII,  422;  LI,  786; 
LXI,  422;  Munsey's  Mag.,  XXII,  538.] 

14.  "The  sugar  situation  in  Cuba  led  to  the  revolution  which  brought 
about  our  recent  Spanish  war,  and  thus  indirectly  the  expansion  of  the 
American  republic  into  imperialism."  (Seligman,  Princ.  of  Econ.,  40.) 
Comment  on  this. 

15.  Ascertain  to  how  many  foreign  countries  the  products  of  some 
local  factory  are  sent;  to  how  many  States  in  the  United  States. 

16.  Is  there  a  waste  of  lalior  involved  in  the  constant  exchange  and 
transportation  of  products  throughout  the  country? 


COMMERCIAL    EXPANSION  469 

17.  Are  the  rich  growing  richer,  and  the  poor,  poorer?  [C.  D.  Wright, 
Pract.  Soc,  343-9;  Ibid,  in  Atl.  Mo.,  LXXX,  300;  The  Concentration  of 
Wealth  (symposium),  in  Independent,  May  1, 1902;  A.  J.  Ferris,  Pauperizing 
the  Rich.] 

18.  In  a  speech  in  April,  1906,  President  Roosevelt  said:  "As  a  matter 
of  personal  conviction,  and  without  pretending  to  discuss  the  details  or 
formulate  the  system,  I  feel  that  we  shall  ultimately  have  to  consider  the 
adoption  of  some  such  scheme  as  that  of  a  progressive  tax  on  all  fortunes, 
beyond  a  certain  amount,  either  given  in  life  or  devised  or  bequeathed 
upon  death  to  any  individual  —  a  tax  so  framed  as  to  put  it  out  of  the 
power  of  the  owner  of  one  of  these  enormous  fortunes  to  hand  on  more 
than  a  certain  amount  to  any  one  individual."     Discuss  this. 

SELECTED   REFERENCES.     CHAPTER  XXX 

* Commerce  and  Navigation  of  the  United  States,  Annual  Reports 

of  the  U.  S.  Treasury  Dept.  on. 
*Holmes:  Concentration   of   Wealth   in   the   United   States,    in   Political 

Science  Quarterly,  VIII,  589. 
**Lawson:  American  Industrial  Problems,  chaps.  20-23. 
*Leroy-Beaulieu :  The  United  States  in  the  Twentieth  Century,  357-379. 

** Monthly  Summary  of  Commerce  and  Finance. 

**Vanderlip:  American    Commercial    Invasion,    in    Scribner's    Magazine, 

XXXI,  3,  194,  387. 

Appleton's  Annual  Encyclopedia  (especially  since  1896). 

Nelson:  The  United  States  and  its  Trade. 

Mulhall:  Thirty  Years'  of  American  Trade,  in  North  American  Review, 

CLXV,  502. 
Spahr:  The  Distribution  of  Wealth  in  the  United  States. 
Stead:  The  Americanization  of  the  World,  342-381. 
Strong:  Expansion,  40-135. 


BIBLIOGRAPHY 

General  Works  of  Reference 

The  following  fifteen  books  cover,  more  or  less  completely,  the 
most  important  phases  of  the  economic  development  of  the  country. 
Only  one  of  them  attempts  to  treat  the  subject  in  its  entirety,  the  others 
being  either  of  older  date  or  limited  in  scope,  but  they  will  all  be  found 
of  value  as  reference  works. 

Bliss:  Encyclopedia  of  Social  Reform. 

Bolles:  Industrial  History  of  the  United  States. 

Census  Reports,  especially  for  1860,  1880,  and  1900. 

Coman:  Industrial  History  of  the  Ignited  States. 
Depew:  One  Hundred  Years  of  American  Commerce. 

■  Eighty  Years'  Progress. 

Emery:  Economic    Development    of    the    United    States,    in    Cambridge 

Modern  History,  vol.  7,  chap.  22. 
Gannett:  The  Building  of  a  Nation. 

Leroy-Beaulieu :  The  United  States  in  the  Twentieth  Century. 
Lossing:  History  of  American  Industries. 
Shaler:  The  United  States. 

The  Nineteenth  Century. 

Whitney:  The  United  States. 

Woolsey:  First  Century  of  the  Republic. 

Wright:  The  Industrial  Evolution  of  the  United  States. 

Valuable  statistical  and  other  information  can  also  be  found  in  the 
reports  of  the  Department  of  Agriculture,  of  the  Department  of  Com- 
merce and  Labor,  of  the  Industrial  Commission,  of  the  United  States 
Geological  Survey  (Mineral  Resources);  in  Strong's  Social  Progress,  the 
World  Almanac,  etc.;  in  the  Publications  of  the  American  Economic  Asso- 
ciation, in  the  various  economic  journals,  and  also  in  the  current  maga- 
zines, especially  The  World's  Work  and  The  World  Today.  This  hst 
should  be  supplemented  by  one  or  more  good  histories  of  the  United 
States;  McMaster  pays  most  attention  to  economic  conditions,  but  the 
recent  American  Nation  Series  is  also  valuable  in  this  respect. 

Abbot,  Willis  J.     American  Ships  and  Sailors.     Dodd,  Mead  &  Co.,  1902. 
Adams,  C.  C.     Commercial  Geography.     N.  Y.,  D.  Appleton  &  Co.,  1901, 

471 


472  BIBLIOGRAPHY 

Adams,  C.  F.,  Jr.  Railroads,  their  Origin  and  Problems.  D.  Appleton 
&  Co.,  1888. 

Adams,  C.  F.,  Jr.     The  Granger  Movement.     No.  Amer.  Rev.,  120:  394. 

Adams,  C.  F.,  Jr.  Chapters  of  Erie  and  other  Essays.  Boston, 
1871. 

Adams,  Henry.     History  of  the  United  States.    9  vols.    X.  Y.,  1889-1891. 

Adams,  Henry.     Life  of  Albert  Gallatin.     Philadelphia,  1879. 

Adams,  Henry  Carter.  The  Relation  of  the  State  to  Industrial  Action. 
Publ.  Amer.  Eeon.   Ass'n,  vol.   1,  no.  6.  Baltimore,   1887. 

Adams,  Henry  Carter.     Public  Debts.     N.  Y.,  1887. 

Adams,  Henry  Carter.  Taxation  in  the  United  States,  1789-1816. 
J.  H.  U.  Studies,  II,  Nos.  5  and  6. 

Adams,  Henry  Carter.     Science  of  Finance.    N.  Y.,  Holt,  1898. 

Adams,  T.  S.,  and  Sumner,  Helen.  Labor  Problems.  N.  Y.,  Macmillan, 
1905. 

Aldrich  Report  on  Wholesale  Wages,  Prices,  and  Transportation. 
Report  by  N.  W.  Aldrich  from  the  Senate  Committee  on  Finance, 
March  3,  1893  (Senate  Report,  No.  1394,  Finance  Committee,  2  sess., 
52d  Cong.)     4  vols.  Washington,  1894. 

Agriculture,  Annual  Reports  and  Year-books  of  the  Department  of. 
[Previous  to  1862,  agricultural  reports  were  printed  as  part  of  the 
report  of  the  Commissioner  of  Patents;  between  1862  and  1888,  as 
reports  of  the  Commissioner  of  Agriculture;  since  1889,  as  reports 
of  the  Secretary  of  Agriculture.  The  year-books  have  been  issued 
since  1894.] 

Allen,  Lewis  F.  American  Cattle:  their  History,  Breeding  and  Manage- 
ment.    N.  Y.,  1868. 

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American  Annual  Cyclopaedia,  The.     N,  Y.,  1861- 

American  Economic  Association,  Publications  of  the.     N,  Y.,  1886- 

American  Geographical  Society,  Bulletin.     Washington. 

American  Historical  Association,  Proceedings  of  the.  N.  Y.,  1886-1891; 
Washington,  1892- 

American  Historical  Review.     N.  Y.,  1896- 

American  Husbandry,  2  vols.     London,  1775.     [See  Arthur  Young.] 

American  Journal  of  Sociology.     Chicago,  1896- 

American  State  Papers.  Finance  [1789-1828.]  5  vols.  Washington, 
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American  Statistical  Association,  Publications  of.     Boston,  1889- 

Anburey,  Thomas.  Travels  through  the  Interior  Parts  of  America.  2 
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Andreas,  A.  T.     History  of  Chicago.     Chicago,  1878-1880. 


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INDEX 


rVdams,  Henry,  123  n. 

Henry  C,  106. 

John,  46  n. 

T.  S.,  428. 
Africa,  38,  39,  83,  85,  119,  120,  181; 

three-cornered  trade  with,  42, 
84. 
Agriculture,  36,  145,  160,  161,  303. 

adaptation    and    experimenta- 
tion with  plants,  67. 

agricultural   products  in  1800, 
125. 

causes  of  progress,  125. 

cereal  production,  294. 

changes  in  farming,  1840-1860, 
244. 

character  of,  234-235. 

colonial  occupations,  62. 

colonial  methods,  65. 

cotton,  296. 

Department  of,  280,  302. 

effect  of  the  Civil  War  on,  266. 

era  of  small  farms  in  the  South, 
273. 

European,  64. 

failure   of  the   plantation  sys- 
tem in  the  South,  272. 

grain  trade,  245. 

growth  of,   286. 

growth  of  the  grain  states,  267. 

growth    of    the    international 
grain  trade,  270. 

home  consumption  of  products, 
246. 

improvements,  1840-60,  240. 

Indian,  65. 

industrial  expansion,  238. 

in  North,  122. 

in  South,  122. 

miscellaneous  plants,  70. 

miscellaneous  products,  297. 

native  plants,  67. 

pioneer  farming,  62. 

plantations  of  the  South,  75. 

production  of  cereals,  268. 


share  system,  274,  431. 
system   of  agricultural   credit, 

275. 
the  colonial  farmer  a  jack  of 

all  trades,  63. 
thresher  and  reaper,  238. 
tobacco,  70. 

value  of  products  in  1900,  293. 

See    Agricultural    implements. 

Cotton,  Farming,  Lands. 

Agricultural  credit,  273,  275. 

Agricultural   implements,    57,    122, 

165,  183,  377,  382,  405,  455. 

after  the  Revolution,  123-125. 

agricultural  machinery,    1860- 

1880,  269. 
agricultural   machinery,    1880- 

1906,  291-293. 
benefits    of    farm    machinery, 

241. 
implements,  1840-60,  240. 
improvements  in,  232. 
in  the  colonies,  73. 
the  thresher  and  reaper,  238. 
Agricultural   machinerv,   238,   242, 

269,  270,  291-293,  367. 
Agricultural  .societies,  123,  125,  234. 
Alabama,  6,  120,  179,  245,  383,  390. 
Alaska,  3. 
Albany,  111,  191. 
Aldrich  report,  225,  340,  428,  429, 

448. 
Alexander  VI,  27. 
Aliens,  see  Foreign-born. 
Alleghany  mountains,  54,  170,  183. 
Allspice,  67. 
Aluminum,  7,  393. 
"American  Husbandry,"  66,  72. 
American  Steel  and  Wire  Company, 

407. 
Andrew,  John  A.,  246. 
Annapolis  Convention,  135. 
Anthracite  Coal  Combination,  407. 
Appalachian  Region,  11. 
Apples,  64,  71,  177,  232. 


503 


504 


INDEX 


Arbitration   and    conciliation,    447. 
Area  of  the  United  States,  2. 
Arizona,  7,  20,  300. 
Arkansas,  180,  213,  245. 
Arkwright,  Richard,  131,  132,  136. 
Articles  of  Confederation,  103,  135. 
Asia,  38,  39,  67. 

Atlanta  Cotton  Exposition,  360  n. 
Australia,  283,  441. 

discovery  of  gold  in,  206,  222. 
Austria,  204,  272,  397,  437. 
Axe,  64,  124,  165,  193. 
Azores,  40,  42. 

Bacon,  41,  108,  177,  182, 
Baffin,  William,  29. 
Bagging,  166,  178. 
Balance  of  trade,  36,  457. 
Baltimore,  89,   191,   192,   193,  208, 

213,  233,  311,  380. 
Baltimore  and  Ohio  railroad,   199, 

309,  322,  427. 
Bancroft,  G.,  88,  89. 
Banks,  colonial  banks,  93. 

First  United  States  Bank,  218. 

history    of    national    banking 
system,  344-346,  351. 

inflation  of  the  currency,  219, 
220,  353. 

national  banking  act,  344. 

Second    United    States    Bank, 
219. 

State  aid  to  banks,  195. 

State  banks,  219,  224,  351. 
Barley,  41,  64,  70,  71. 
Barr,  Alexander,  134. 

Robert,  134. 
Beans,  41,  64,  65. 
Beaver  skins,  37,   39,  41. 

hats,  59. 
Beef,  41,  72,  125,  277,  405! 

trust,  416. 
Belgium,  204,  272. 
Berkeley,  Sir  William,  82. 
Berries,  71. 
Beverley,  Mass.,  135. 
Bicycle,  385. 

Bills  of  credit,  see  Money,  paper. 
Birmingham,  Ala.,  383. 
Bishop,  J.  L.,  50,  55,  149. 
Blacksmithing,  49,  55. 
Bland,  Richard,  348. 
Bland-Allison  act  of  1878,  348. 
Blankets,  138. 


Blast,  151,  164,  362. 

See  Furnace. 
Board   of  Trade   and    Plantations, 

52,  57. 
Bonds,  United  States,  343,  344,  345, 

351. 
Books,  143,  336. 

binding,  423. 
Boots  and  shoes,  161,  162,  165,  166, 
364,  377,  380,  381,  422. 
buffing  machine,  365. 
lasting,  365. 

leather  rolling  machine,  365. 
machinery,  158. 
peg-making  machine,  365. 
power-pegging  machine,  365. 
sphtting  machine,  365. 
Boston,  53,  89,  121,  130,  192,  193, 

208,  311. 
Bounties,  36,  45,  50,  59,  62,   100, 

396. 
Brandy,  46. 
Brass  ware,  58,  380- 
Bread,  41,  43,  165. 

stuffs,  266,  271. 
Bremen,  204. 
Brewing,  379. 

See  Liquors,  malt. 
Bricks,  58,  59. 
Bricklayers'  union,  425. 
Brissot  de  Warville,  J.  P.,  136. 
British     Iron    Trade    Association, 

439. 
Brockton,  Mass.,  380. 
Brook  Farm,  225. 
Buckwheat,  70,  71,  294. 
Buffalo,  N.  Y.,  191,  192. 
Buggy,  243. 
Building  stone,  7. 
Bureau  of  Corporations,  406,  415, 

416. 
Butter,  41,  73,  125,  243,  278,  298. 
factories,  278,  377. 

Cabbages,  64. 

Cabinet  wares,  58,  152,  165,  177. 

Cable,  314,  335. 

Calhoun,  John  C,  175. 

Cahcoes,  97,  161. 

Cahfornia,  7,  20,  222,  224,  245,  283, 

298,  326,  380,  437.^- 
Callender,  Guy  S.,  175, 
Calves,  72. 
Canada,  22,  422, 


INDEX 


505 


Canals,  186-194,  195,  197,  230,  241, 
311,  329. 

See  Erie,  Panama,  St.  Mary's, 
Welland,  etc. 
Canary  Islands,  50. 
Candles,  55,  143,  165,  178. 
Candy,  405. 
Canvas,  31. 
Cards,  playing,  143. 
Carey,  Henry  C,  212. 
Carnegie,  Andrew,  281,  390. 
Carnegie  Company,  390. 
Carolinas,  11,  23,  73,  81,  118,  120. 
Carpentry,  49,  55. 
Carpet-bag  government,  273. 
Carpets,  360,  377,  380. 
Carriages,  136,  152,  165. 
Carrying-trade,    104-109,    203-208, 
313. 

See  Shipping. 
Cars,  dining,  307. 

refrigerator,  297.  298. 

sleeping;,  307. 

steel,  390. 
Cart,  58.  64,  240. 
Cartwright,  Edward,  132. 
Cash  register,  385. 
Cattle,  43,  63,  69,  72,  125,  172,  177, 
233-234,  241,  243,  256,  276, 
299. 

export,  277. 

raising^  73. 
Cements,  8. 

Census,  147,  161,  293,  360,  404,  428. 
Central  America,  19,  397. 
Central  Pacific  railroad,  307. 
Cereals,    231,    232,    256,    268,    271, 

294-296,  311,  405. 
Channing,  Edward,  14. 
Character  of  the  people,  2,  376. 
Charcoal,  164. 

Charleston,  89,  120,  121,  123,  208. 
Cheese,  41,  73,  125,  243,  277,  298. 

factorj^  244,  277,  377. 
Cherries,  71,  232. 
Chesapeake  and  Ohio  canal,  189. 
Chewins:  gum.  405. 
Chicago^  111.,  212,  213.  231,  234,  243, 

245.  277,  299.  309. 
Child  labor,  384,  422,  424. 
China  (country),  1,  137,  459. 

trade  with,  206,  313. 

(commodity),  138. 
Chocolate,  143. 


Churn,  277. 
Cider,  177. 

Cigarmakers'  union,  425. 
Cincinnati,  O.,  177,  189,  193,  234 

243,  383. 
Cinnamon,  67. 

Cities,  154,  159,  175,  189,  358,  420. 
Citizens'   Industrial  Association  of 

America,  445. 
Civil  War,  122,  162,  166,  181,  217 
225,  259,  266-267,  271,  272, 
279,  288,  305,  307,  310,  311, 
338,  369,  374,  419. 
as  an  industrial  revolution,  356. 
Clapboards,  49,  56. 
Clays,  8. 

Clermont,  111,  175. 
Cleveland,  Grover,  395. 
Cleveland,  O.,  193. 
Climate  and  economic  development, 

13. 
Chpper  sailing  vessel,  204-206. 
Cloaks,  364. 
Clocks,  143,  166,  367. 
Cloth,  55,  137. 
Clothing,  162,  183,  356.  386. 

men's,  165,  166,  363. 
Clover,  64,  72. 

Coal,  5,  6,  13,  151,   161,  164,  210, 
281,  306,  312,  318,  319,  331, 
333,  351,  358,  362,  383,  393, 
405,  455,  460. 
anthracite,  151,  362,  390. 
Coast  line.  3,  376. 
Coastal  Plain  Region,   11. 
Coasting  trade,  108,  204,  209,  312, 

333. 
Cochineal,  59. 
Cod,  8,  52,  209. 
Coffee,  37,  46,  63,  97,  146,  370,  397. 

trust,  411. 
Cohoes,  N.  Y.,  145. 
Coinage,  218,  221-224. 
ratio,  222. 
See  Silver. 
Coke,  164,  380,  390. 
Cold  storage,  298. 
Collars  and  cufTs.  380. 
Colonial  policy,  English,  34-45. 
early    commercial    freedom    of 

the  colonies,  38. 
economic  conditions  in  Europe, 

34. 
encouragement  to  industry,  45. 


506 


INDEX 


English  colonial  policy,  37. 

evasion  of  restrictions,  45. 

mercantile  system,  34. 

money    and    the     balance    of 
trade,  36. 

navigation  ordinance  of  1651, 
38,  39. 

prohibition  of  exports,  41. 

protection  to   agriculture   and 
industry,  36. 

protection  to  shipping,  35. 

regulation     of     colonial     com- 
merce, 39-41. 

restrictions  upon  imports,  42. 

restrictions  upon  intercolonial 
trade,  43. 

restrictions  upon  manufactures, 
44. 
Colonization,  17-32. 

Dutch,  20. 

English,  22-26. 

French,  21. 

motives,  26-32. 

Spanish,  19-20. 
Colorado,  6,  7,  299,  300,  394. 
Columbus,  Christopher,  18,  19,  29, 

69. 
Combination,   see   Industrial  Com- 
binations. 
Commerce,  38-43,  53,  54,  62,  97- 
112,  130,  145,  238,  328-334. 

colonial,  37-46. 

domestic,    178-184,   208,   20^ 
211,  459-460. 

foreign,  207,  454. 

See   Colonial    Policy,    English; 
Commercial    Policy,   Ameri- 
can; Trade;  Shipping. 
Commercial  expansion,  454-460. 

domestic  commerce,  459. 

exports,  454. 

growth    of   the    foreign   trade, 
454. 

imports,  456. 

invasion    of    foreign    markets, 
457. 
Commercial  policy,  American,  97- 
112. 

blows  at  neutral  trade,  106. 

commerce    and    manufactures 
during  the  Revolution,  100. 

commercial  treaties,  109. 

Continental     wars     and     neu- 
trality, 104. 


efforts     towards     freedom     of 

trade,  101. 
embargo    and    non-intercourse 

acts,  107. 
English  policy  of  taxation,  97. 
expansion    of   American    ship- 
ping, 105. 
failure  of  efforts  at  freedom  of 

trade,  101. 
federal    control    of   commerce, 

103. 
harvest  from  neutrality,  104. 
imports  in  the  colonies,  97. 
non-importation  as  a  means  of 

defence,  98. 
non-importation     associations, 

99. 
retaliation  by  the  States,  102. 
tonnage  acts,  106. 
Commercial  treaties,  109,  204,  397. 
Commission  of  Inquiry  of  House  of 

Commons,  1732,  44. 
Communication,    89,    91,    213-214, 
313,  334. 
improved  means  of,  213-215. 
in  colonies,  89,  91. 
See     Post    Office,     Telegraph, 
Telephone. 
Compass,  17. 
Comstock  lode,  283. 
Concentration   of   production,   376, 

401. 
Concentration  of  wealth,  460-462. 
Conditions  of     economic     develop- 
ment, 1. 
Congress,   106,   107,   108,   119,   121, 
158,  180,  181,  188,  204,  213, 
229,  247,  280,  307,  342,  343, 
350,  394,  396,  414,  416,  421, 
425. 
Continental,  91,  99,   101,   103, 
130,  135,  217. 
Connecticut,  23,  53,  72,   103,   121, 

123,  161,  380. 
Connellsville,  Pa.,  380. 
Constitution,  federal,  101,  103,  106, 
135,  217,  338. 
state,  196. 
Convicts,  81. 
Coopers'  wares,  58. 
Copper,  6,  13,  31,  39,  165,  283,  331, 

358.  393,  396,  405,  455. 
Cordage,  58,  59,  177. 
trust,  410. 


INDEX 


507 


Cordilleraii  Recjion,  12. 

Corn,  11,  13,  63,  65,  67.  68,    71,  72, 

102,  105,  122,  125,  177,  182, 

193,  231,  240,  241,  247,  269, 

272,275,  294, -295,  351,  358. 

brooms,  177. 

exports,  272. 

laws,  145,  159,  160,  208,  238, 
246. 

meal,  125. 

planter,  239. 
Corporations,    194,    196,   225,   400- 
401. 

See  Industrial  Combinations. 
Co.st  of  living,  225,  340,  428,  429, 
448.  _ 

See  Prices,  Wages. 
Cotton,  raw,  11,  13,  39,  43,  67,  71, 
72,  115-120,  122,  125,  128, 
178-183,  189,  208,  209,  229, 
230,  232,  238,  247,  251-264, 
passim,  266,  267,  269,  273, 
275,  276,  293,  294,  296-297, 
311,  333,  376,  383,  449,  455, 
460. 

exports,  179,  246,  296. 

gin,  116,  119,  179,  360. 

picking  machinerv,  297. 

price,  129,  148,  179,  230,  256, 
272,  273,  289. 

seeds,  122,  360. 

seed  oil,  297,  397,  402,  405. 

seed  planter,  296. 

stalk  cutter,  296. 
Cotton  culture,  cotton  is  king,  256. 

effect   of  extension  on   South, 
179. 

effect  of,  on  slavery,  117. 

effect  of  slaverv  on  production 
of  cotton,  258. 

extension  of,  119. 

introduction  of,  115. 

production,  1880-1906,  296. 

spread  of,  into  the  Southwest, 
178. 

the  plantation  system,  257. 

Whitney's  cotton-gin,  116. 
Cotton  manufactures,  133,  138,  142, 
143,  146,  147-149,  153,  157, 
161,  162,  163,  165,  358,  359, 
360  n.,  376,  377,  380,  381, 
382,  383,  386-388,  396,  423, 
455. 

bagging,  166,  178. 


factories,   144,   172. 

spindles,  162,  358,  359,  382. 
Coxe,  Tench,  118,  137,  147. 
Coxey's  army,  351. 
Cradle-scythe,  124,  230. 
Cream  separator,  298. 
Credit,  335. 
Crimean  War,  206. 
Crisis,  see  Panic. 
Crompton,  Samuel,  131,  133. 
Cromwell,  Oliver,  35. 
Crop  lien,  275,  289. 
Cropping   system,  see   Agriculture, 

share  system. 
Cuba,  19,  298. 
Cultivator,  233,  240. 
Cumberland  Road,  188. 
Cunard  line  of  steamships,  207. 
Cunningham,  William,  424. 
Currency,  see  Money. 
Currency  act  of  1900,  352. 
Cutlery,  138,  153,  396. 

Dairy  products,    13,   73,  243,  276, 

277,  293,  294,  298,  299. 
Dakotas,  267,  270. 
Dallas,  Alexander  J.,  144. 
Davis,  John,  29. 
DeBow,  J.  p.  B.,  181,  258,  259. 
Debt,  imprisonment  for,   139,   154, 
226,  424. 

of  States,  194-196. 

farm  mortgages,  289. 
Delaware,  74,  414,  415. 
Denmark,  43,  422. 
Detroit  River,  312. 
Dewey,  Davis  R.,  358. 
Diaz,  Bartholomew,  17. 
Differential  rates,  311,  323. 
Dining  cars,  307. 
Discrimination,  see  Railroads. 
Dismal  Swamp  Canal,  189. 
Ditch  digging  machine,  292. 
Dollar,  silver,  222-224. 
Domestic  service,  423,  438,  449. 
Dorchester,  New  England,  50. 
Drake,  Francis,  18,  23. 
Dress  goods,  360. 
Dutch,  17,  20,  31,  38,  50,  75,  84. 

See  Holland. 
Duties    (imposts),    36,    59,   97,   98, 
103,  105,  135,  136,  138,  369. 

specific,  166. 

discriminating,  204. 


508 


INDEX 


Duties.     See  Tonnage  dues. 
Dyeing  and  finishing,  360,  386. 
Dyes,  37,  39. 
Dynamite,  385. 

Earthenware,  143. 

East,  175,  183,  186,  189,  193,  197, 

307. 
East   India   Company,    Dutch,    20. 

Enghsh,  106. 
East  Liverpool,  Ohio,  380. 
Education,  see  Schools. 
Eggs,  278,  293,  298. 
Electrical  apparatus,  385,  405,  456. 
Electric  interurban  railroads,   328, 

335 
Electricity,  384,  385. 

alternating  current,  385. 
lighting,  385,  405. 
Elect  rotyping,  369. 
Elevator,  grain,  270. 
Elizabeth,  Queen,  23,  35. 
Embargo,   107-109,   125,   138,   142, 
144,  146,  170,  174,  203,  207, 
234. 
England,  17,  19,  21,  23,  24,  27,  28, 
29,    31,    34-46,    passim,    56, 
80,  97,  98,  102,  104,  107,  109, 
115,  120,  131,  133,  134,  136, 
137,  142,  145,  149,  151,  171, 
179,  183,  196,  206,  246,  326, 
358,     367,    376,    384,     435, 
441. 
See  Colonial  policy. 
Entail,  76. 
Enumerated   commodities,    37,    39, 

40,  50. 
Erie  Canal,  11,  178,   190-193,  194, 
210,  230,  311,  329. 
lake,  178,  189,  331. 
railroad,  309,  351. 
Europe,  2,  3,  7,  11,  31,  34,  36,  39, 
52,  64,  67,  71,  73,  83,   101, 
104,  105,  138,  198,  206,  224, 
238,  246,  266,  284,  297,  298, 
358,  367,  375,  383,  435. 
Evans,  Frederick  W.,   154. 
George  H.,  154. 
Oliver,    110,  135. 
Exhaustion  of  soil,  67,  257. 
Exploration,  17-32. 
Dutch,  20. 
English,  22. 
French.  21. 


geographical  discoveries,  17. 
motives,  26-32. 
Spanish,  19. 
Exports,  prohibition  of  colonial,  to 
England,  41. 
from  United  States,  125,  163, 

208,  454-456. 

of  grain,  266-272. 

Express  business,  309,  405. 

Factory  system,  136,  142,  145,  146, 
147,  157-169,  225,  379,  384, 
420,  423,  451. 

acts,  439. 

effect  on  employment  of  women 
and  children,  423. 
Failures,  351. 
Fair,  county,  234. 

World's  Fair  at  London,  239, 
367. 
Fall  line  of  rivers,  5. 
Fall  River,  Mass.,  145,  380,  381. 
Fanning  mill,  64,  125. 
Farming,  62,  65,  172,  234,  245. 

changes  in,  244. 

on  shares,  274,  431. 
Farms,  74,  75,  230-232,  241,  273- 
275 

area,  230,  279,  286. 

bonanza,  289. 

improved    land    in,    258,    268, 
286. 

number,  268,  279,  287. 

ownership,  279,  288-289. 

size,  245,  260,  288. 

value,  288. 

See  Agriculture,  Land  tenure. 
Fauna,  native,  8; 
Federal  government,  188,  193,  194, 

197,  302,  308. 
Feed  chopper,  291. 

grinder,  291. 
Fertilizer,  122,  240,  274,  296,  405. 

distributer,  296. 

See  Manure. 
Firearms,  57,  59,  158,  366. 
Fish,  8,  35,  37,  39,  41,  43,  73,  108. 

commission,  302. 
Fisheries,  31,  39,  52,  302,  313. 
Fishing,  49,  52,  53,  62,  209. 
Fitch,  John,  110,  135. 
Fithian,  Philip,  119. 
Flail,  64,  73. 
Flatboat,  177,  188. 


INDEX 


509 


Flax,  35,  45,  72,  256. 

manufactures  of,   143,  386. 

-seed,  108. 

-seed  oil,  143. 
Florida,  19,  20,  22,  213,  245,  298. 
Flour,  43,  102,  108,  125,  161,  162, 
165,  177,  178,  182,  187,  193, 
210,  212,  245,  267,  272,  311, 
405. 
Flowers,  298. 
Foreign-born,  184. 

proportion    of,    in    population, 
435. 

See  Immigration. 
Forests,  9,  383. 

products,  279-281,  301-302. 
Forestry,  302. 
Forges,'44,  57,  172. 
Fork,  73. 

horse  hay,  241. 
Fountain  pen,  385. 
Fourier,  F.  M.  C,  225. 
Fowl,  8,  177. 
Fox,  Luke,  29. 

France,  19,  21,  22,  24,  28,  31,  38, 
43,   55,    101,    104,    105,    107, 
109,  145,  149,  204,  267,  276, 
288,  326,  388,  397. 
Franklin,  B.,  88,  92. 
Free  trade,  152,  166. 
Freight,  306,  318. 

-car,  318. 

-elevator,  319. 

rates  on  canal,  191. 
French  and  Indian  War,' see  Seven 

Years'  War. 
Frobisher,  Sir  Martin,  29. 
Fruits,  67,  70,  71,  232,  245,  276,  298. 
Fulton,  Robert,  111,  112,  177. 
Fur-bearing  animals,  8. 
Furs,  55,  63,  172. 
Fur  trade,  31,  39,  41,  49,  54. 
Furnaces,  44,  57,  151. 

regenerative  gas,  362. 

blast,  390. 
Furniture,  58,  165,  405. 
Fustick,  39. 

Gallatin,  Albert,  143,  188,  190. 
da  Gama,  Vasco,  17. 
Garfield,  James  R.,  406. 
Geographical  discoveries,  17. 
Geological  Survey,  United  States,  5. 
Georgia,    11,  24,   72,  86,   115,   118, 


119,  120,  179,  259,  261,  298, 
326,  360,  382. 
Germany,    55,    80,    276,    348,    388, 

389,  397,  422,  435. 
Gibbons  vs.  Ogden,  177. 
Ginger,  39. 
Ginseng,  172. 
Girdling  trees,  65,  70,  122. 
Glass,  98,  138,  142,  143,  153,  166, 
167,  178,  377. 
ware,  405. 
Gloves,  380,  423. 
Gloversville,  X.  Y.,  380. 
Glucose,  385,  405. 
Gold,  7,  13,  28,  29,  283,  338,  349, 
351,  393. 
discovery  of,  in  Alaska,  352. 
discovery  of,  in  Australia,  206, 

222. 
discoverv  of,  in  California,  159, 
167,  206,  222-223,  238,  307. 
reserve,    343,    349,    3.52. 
standard,  348,  352. 
See  Money. 
Gould,  B.  A.,  14. 
Grand  Eight-hour  League,  427. 
Grand  Trunk  railroad,  309. 
Grain,  35,  36,  37,  39,  70,  73,  187, 
212,  232,  238,  239,  244,  267- 
270,  293,  294,  306,  307,  318, 
329,  331,  357,  460. 
exports,  246. 
grading,  270. 
harvester,  239. 

trade,  231,  24^246,  270-272. 
traffic,  309. 
Granger  railroad  legislation,  326. 
Granite  cutters'  union,  425. 
Grant,  U.  S..  343. 
Grapes,  71,  232  n. 
Graphite,  8. 
Grass,  276.     See  Hay. 
Great  Britain,  11,  22,  56,  57,  64,  99, 
100,  104,  109,  117,  130,  137, 
162,  172,  267,  272,  276,  282, 
288,    302,     376,    388,     389, 
422. 
See  England. 
Great  Lakes,  11,  54,  178,  230,  390, 
459. 
commerce  on,  209,  312,  331. 
Great  Northern  railroad,  334. 
Great  Plains  Region,  12. 
Great  Western,  206. 


510 


INDEX 


Greenbacks,     see     United     States 

notes. 
Grenville,  George,  97. 
Grindstones,  8. 
Grubber,  233. 
Gunpowder,  17,  136,  143. 
smokeless,  385. 

Hair  powder,  143. 

Hakluyt,  Richard,  29. 

Hamburg,  204. 

Hamilton,  Alexander,  136,  137. 

Hammond,  James  H.,  253. 

Hancock,  John,  46  n. 

Hardware,  136,  138,  142,  144,  161, 

165. 
Hargreaves,  James,  131. 
Harrow,  64,  73,  291,  297. 
Harvester,  239,  270,  291. 
Hats,  36,  55,  59,  136,  143,  152,  161, 

165,  423. 
Havana,  22. 
Hawaii,  297,  298. 
Hawkins,  R.,  23. 
Hay,  125,  239,  293,  294,  301. 

-rake,  239,  291. 

-stacker,  291. 

tedder,  291. 
Hemp,  35.  39,  45,  50,  59,  63,  67, 
72,  108,  153. 

manufactures  of,  143,  386. 
Henry  IV  (of  France),  21. 
Henrv  VII  (of  England),  35. 
Hepburn  act,  323,  328. 
Hides,  39,  55,  165,  172,  397. 
Hill,  William,  60. 
Hoe,  64,  124. 

horse-,  233,  240,  241. 
Hogs,  63,  172,243,277. 

See  Swine. 
Holland,  19,  21,  24,  28,  38,  43,  101, 
105,  109,  137,  145,  204,  348. 

See  Dutch. 
Holmes,  George  K.,  462. 
Holyoke,  Mass.,  145. 
Homestead  act,  267-268. 
Horses,  43,  72,  125,  172,  183,  242- 

243,  276,  292,  293,  299. 
Hosiery,  360,  386,  423. 
Hot-air  blast.     See  Blast. 
Hudson  Bay,  24. 
Hudson,  Henry,  21,  29. 
Hudson  River,  50,  54,  175,  189,  193, 
311. 


Hussey,  Obed,  232. 

Iceland,  1. 
Idaho,  300. 

Illinois,  125,  174,  187,  196,  213,  231, 
241,  246,  266,  382,  390,  393. 
railroad  commission,  326. 
Illinois  Central  railroad,  213. 
Immigration,  88,  159,  167,  183,  184, 
206,  223,  224-225,  262,  267, 
305,  420-422,  431,  434-437, 
450. 
bureaus,  421. 
Chinese,  437. 
convict  labor,  437. 
industrial  effects,  421. 
restrictive  legislation,  437. 
Imports,     restrictions     upon,     into 
colonies,  40,  42. 
into   United  States,    137,    145, 

152,  168,  456. 
of  manufactures,  137. 
of  specie,  196. 
Impressment  of  labor,  104. 
Income  tax,  396. 

Increasing  returns,  railroads  a  busi- 
ness of,  321. 
Independent  treasury  system,  338. 
India,  1,  137,  351. 
rebellion  in,  206. 
route  to,  17,  18,  21,  29,  34. 
Indiana,  125,    174,    189,    192,    196, 

231,  241,  266,  295,  328. 
Indians,  8,  9,  21,  54,  63,  66,  68,  84, 
89,  97,  171,  300. 
agriculture,  65. 
Indigo,  37,  39,  43,  45,  59,  63,  67, 

71,  72,  97. 
Industrial  combinations,   373,  400- 
416. 
advantages,  408. 
anti-trust  law,  323,  415. 
early  attempts  at,  401. 
effects,  412. 
evils,  409. 

extent  of  trust  movement,  405. 
incorporation  laws,  414. 
legislation  against,  414. 
legislative  corruption,  412. 
monopolistic  power,  407. 
organization  and  management, 

414. 
organization  of  industry,  400. 
over  capitalization,  414. 


INDEX 


511 


relation  to  labor,  411. 
publicity,  41G. 
special  favors  to,  4K'. 
standard  oil  trust,  405: 
suppression  of  individual  initia- 
tive, 412. 
trust  movement,  402. 
watered  stock,  414. 
See     Corporations,     Manufac- 
tures. 
Industrial      Commission,       United 

States,  322,  410. 
Industrial    revolution    in    England, 
97. 
in  the  United  States,  142,  143, 
356. 
Industries,  colonial,  49-60. 
bounties,  59. 
commerce,  53. 
fishing,  52. 
fur-trading,  54. 
household  manufactures,  55. 
iron  manufactures,  57. 
luml)ering,  49. 
miscellaneous    manufactures, 

58. 
naval  stores,  50. 
ship-building,  51. 
tariffs,  59. 

textile  manufactures,  50. 
Ingle.  Edward,  183. 
Inheritance,  74,  75. 
Internal  Improvements,   153,   186- 
197,  208,  213,  221,  249,  394. 
by  the  States,  193. 
failure  of  State  enterprise,  196. 
investment  of  borrowed  capi- 
tal, 194-196. 
Interstate  Commerce  Act,  322,  327, 
411,  415. 
long   and    short    hand    clause, 

323. 
commission,  325,  328. 
Inventions,  135,  137,  159. 
Iowa,  174,  213,  267,  294,  295,  326. 
Ireland,  40,  80,  99,  100,  167,  224, 

422,  435. 

Iron,  6,  13,  36,  39,  45,  55,  59,  151, 
178,  281,  282,  306,  329,  331, 
351,  358,  362,  369,  379,  383, 
393,  455. 
and  steel  industry,  334,  361- 
363,  388-392,  404,  405,  421, 

423,  456. 


Bessemer  process,  362,  390. 
concentration  of  industry,  389. 
implements,  63. 
manufactures,  44,  57,  130,  133, 
136,  142,  144,  150-151,  153, 
161,  163-165.  166,  167,  334, 
377,  389,  455. 
ore,  312. 
pig  iron,  37,  39,  362,  376,  383, 

388,  390. 
See  Manufactures,  Mining. 
Iron  and  steel  workers'  union,  425. 
Irrigation,  286,  299-301. 
Italy,  272,  326,  437. 

Jackson,  Andrew,  136,  196. 
Jay,  John,  101. 

Treaty,  109,  117. 
Jamaica,  19. 
James,  Thomas,  29. 
James  I  (of  England),  38. 
Jamestown,  23,  31,  38,  66,  72,  84. 
Japan,  459. 

Jefferson,  Thomas,  107,  108,  124. 
Jevons,  W.  Stanley,  361. 
Jewelry,  143. 
Jews,  Russian,  363. 
Johnston,  J.  F.  W.,  235. 
Johnstown,  X.  Y.,  380. 
Joint  Traffic  Association,  323. 
Jute,  manufactures  of,  386. 

Kalm,  Peter,  66. 

Kansas,  295. 

Kansas  City,  298. 

Kansas  Pacific  railrocd,  308. 

Kentucky,   11,   125,   171,   187,  234, 

253,  276,  297. 
Knights    of    Labor,    42.5-426,    442, 

445. 
Knit  goods,  360,  386. 

Labor,  118,  381. 

advantages  of  servitude,  83. 

agricultural,  430,  449. 

and  Civil  War,  356,  419.    . 

and  Trusts,  411. 

American  Federation  of  Labor, 

443. 
arbitration     and     conciliation. 

447. 
attitude  towards  slavery,  86. 
boycott,  444. 
bureau,  424,  460. 


512 


INDEX 


Labor,  child,  384,  422,  424,  440. 

collective  bargaining,  447. 

condition  of,  138. 

conditions  in  England  in  the 
seventeenth  century,  78. 

cooperation,  79. 

cost  of  living,  428,  448. 

distribution  of  slavery  in  colo- 
nies, 85. 

early  slave-trade,  83. 

efficiency  of,  438. 

employers'  associations,  444. 

employers'  liability,  442. 

factory  inspection,  424. 

factory  system,  136,  142,  145, 
146,  147,  157-159,  225,  379, 
384,  423. 

growth  of  a  wage-earning 
class,  420. 

hours,  424,  425,  430,  440,  443, 
448. 

impressment,  80. 

indented  servants,  80,  82. 

industrial    and    economic 
changes,  225. 

industrial  distribution,  437. 

industrial  effects  of  immigra- 
tion, 421. 

industrial  unrest,  153. 

insurance,  440. 

introduction  of  slavery  into 
America,  84. 

in  South,  431,  449. 

involuntarv  servitude,  8. 

Knights  of  Labor,  425,  442, 
445. 

legislation,  424,  437,  439-442. 

organizations,  139,  225,-373, 
442. 

population  and  immigration, 
420,  434. 

scarcity  in  colonies,  79. 

strikes,  426,  445. 

trade  unions,  425,  443. 

trade  union  methods  and  poli- 
cies, 443. 

unemployment,  351,  448. 

Avages,  225,  342,  427,  441,  448. 

women,  422,  440. 

See   Immigration,    Population, 
Trade  Unions. 
Lands,  public,  159,  213,  221,  247- 
249,  299-301,  307. 

disposal  of  the  land  for  settle- 


ment the  permanent  policy, 
228. 
early  land  policy,  127. 
grants  of  land,  247,  308. 
Homestead  Act,  267. 
importance  of,  228. 
irrigation  and  the  public  lands, 

299. 
pre-emption  of,  247.  268. 
sales  of,  194,  228,  230. 
sales  on  credit,  127. 
speculation  in  Western  lands, 

229,  247. 
See  Farms. 
Land  tenure,  73-76,  279,  289,  297. 
Lard,  161,  182,  311. 
Large-scale     production,     377-379, 
401. 
advantages  of,  378. 
Latin  Monetary  Union,  348. 
Lawrence,  Mass.,  145. 
Lead,  7,  13,  98,  143,  153,  161,  393, 

402. 
Leather,  36,  55,  63,  143,  153,  162, 
379.  405. 
manufactures  of,   58,  59,   136, 

165,  167,  377,  455,  456. 
trust,  411. 
Lentils,  67. 

Leroy-Beaulieu,  Pierre,  293. 
Levasseur,  E.,  439. 
Ley  land  steamship  line,  334. 
Lieljig,  Justus,  240. 
Limestone,  383. 

Linen,  56,  57,  59,  133,  138,  153. 
Linotype  machine,  385. 
Liquors,  60,  144. 

mah,  59,  143,  165,  377.       • 
spirituous,  58,  136,  143,  165. 
vinous,  380. 
Live  stock,  72,  125,    182,  233-234, 
242-244,  255,  276,  293,  294, 
298,  299,  318,  460. 
trust,  410. 
See  Cattle. 
Livingston,  Robert  P.,  112,  177. 
Locomotive,  319,  367,  405,  456. 
Locomotive  engineers'  union,  425. 
Logwood,  43. 

London,  29,  56,  57,  72,  239. 
World's  Fair,  239,  367. 
London  Company,  74. 
London  Society  of  Arts  and  Manu- 
factures, 59. 


INDEX 


513 


Long  Island  Sound,  89. 
Longstreet,  William,  111. 
Louisiana,  19,  20,  22,  120,  173,  177, 

179,  196,  213,  245,  259,  276, 

297. 
Louisville,  Ky.,  178. 
Lowell,  Francis  C,  144. 
Lowell,  Mass.,  145. 
Lubeck,  204. 
Lucerne,  67,  125. 
Lumber,  13,  45,  49,  50,  63,  162,  165, 

280,  281,  301,  306,  312,  318. 

329,  331,  333,  358,  379,  384, 

460. 
Lumbering,  49. 
Luxuries,  358,  457. 
Lynn,  Mass.,  381. 

Machine  production,  379,  384. 
Machinery,  130-136,  146,  151,  157, 
158,  159,  162,  165,  266,  274, 
362,  366,  376. 
England  forbids  exportation  of, 

133. 
interchangeable  parts,  366. 
introduction    into    the    United 

States,  134. 
standardization,  367. 
See    Cotton,    Textile,    Agricul- 
tural: 
McCormick,  Cyrus  H.,  232. 
McKay  sewing  machine,  365. 
McKeesport,  Pa.,  380. 
Madder,  67,  125. 
Madeira  islands,  40. 
Magellan,  Fernando,  18,  29. 
Mails,  188. 
Maine,  23,  50,  180. 
Maize,  67,  70. 
See  Corn. 
Manning,  William,  232. 
Manufactures,  36,  43,  62,  238,  256, 
262,421,  457. 
advantages  of  large  scale  pro- 
duction, 377. 
h\Yt\\    of   the    factory   system, 

136. 
causes    of    growth,    159,    356, 

376. 
causes  of  localization,  380. 
Civil  W^ar  as  an  industrial  revo- 
lution, 356. 
clothing    and    footwear,    363- 
365. 


comparison  of  United  States 
with  other  nations,  374. 

concentration  in  large  estab- 
lishments, 377. 

Constitution  and  the  beginning 
of  protection,  135. 

cotton,  147-149,  162. 

culmination  of  the  small  in- 
dustry, 157. 

directions  of  inventive  activity, 
158. 

during  revolution,  100,  130. 

economic  independence,  146. 

England  forl:»ids  the  exporta- 
tion of  machinery,  133. 

general  prosperity,  160. 

growing  self-sufficiency  of  the 
United  States,  358. 

growth  of,  143,  161,  357,  373. 

household,  49,  55,  136,  422. 

importations  of  manufactures, 
137. 

industrial  combinations,  400- 
416. 

industrial  revolution  in 
America,  142. 

industrial  revolution  in  Eng- 
land, 131. 

interchangeable  mechanism, 
366. 

introduction  of  machinery  into 
the  Ignited  States  and  at- 
tempts at  manufacturing, 
134. 

in  the  South,  383. 

iron  and  steel,  57,  150,  163- 
165,  361-363,  388,  390-392. 

localization  of  industries,  379. 

migration  of  industries,  381. 

miscellaneous,  58,  165,  365, 
392, 

patent  system,  157,  368,  385. 

power  in,  367,  384. 

return  of  peace  after  War  of 
1812,  145. 

standardization  of  machinery, 
367. 

specialization  in  localities,  380. 

spread  of  the  factory  system, 
146. 

tarifif,  59,  152-153,  166-168, 
369-370,  394-397. 

textile,  56,  144,  359-361,  386. 

use  of  anthacite  coal.  151. 


514 


INDEX 


Manufactures,  woolen,  149,  163. 

See    Cotton,    Industrial    Com- 
binations, Iron,  Steel,  Tex- 
tiles. 
Manure,  66. 

See  Fertilizer. 
Marble,  165. 
Markets,  29,  177,  178,  377,  381. 

foreign,  373,  396,  459. 
Marshall,  Alfred,  439. 
Martineau,  Harriet,  423. 
Maryland,  23,  28,  38,  72,  80,  81,  83, 

85,  88,  103,  118,  127,  172, 
192,  193,  196,  253,  276,  380. 

Massachusetts,  51,  52,  59,  73,  84, 

86,  91,  93,  98,  103,  121,  123, 
134,  149,  161,  165,  190,  192, 
200,  224,  327,  380,  383.  393, 
420,  424,  437,  440,  460. 

Massachusetts  Bay,  23. 
Masts,  37,  39,  50. 
Matches,  405. 
Meats,  13. 

packing,  234,  299,  379. 
Mediterranean,  19. 
Mercantile  system,  34-38,  44. 

English  colonial  policy,  37. 

money    and    the     balance    of 
trade,  36. 

protection   to   agriculture   and 
industry,  36. 

protection  to  shipping,  35. 
Merchant  marine,  English,  35,  203. 

American,  313,  332. 

See  Shipping. 
Metals,  manufactures  of,  167. 
Metric  system,  367. 
Mexico,  257. 

Michigan,  7,  174,  189,  192,  196,  213, 
231,  241,  282,  283,  328, 
394. 

lake,  245,  331. 

Salt  Association,  402. 
Middle  colonies,  56,  74,  75,  88,  89, 
93,  99,  102. 

prairie  and  lake  region,  11. 

states,  103,  125,  145,  163,  213, 
245. 
Milk,  278,  298. 
Mill,  flour,  163,  377. 

fulling,  57. 

grain,  135. 

grist,  58,  163,  172,  377. 

saw,  50,  163,  172. 


slitting  and  rolhng,  44,  57. 
textile,  132. 
Millet,  67. 
Millinery,  423. 
Mining,  262,  281-283,  393. 
Minnesota,  267,  295,  326. 
Mississippi  Bubble,  22. 
jetties,  312. 

river,  3,  4,  9,  11,  89,  120,  171, 
172.  173,  175,  177,  178,  180, 
182,  188,  189,  192,  193,  209. 
210,  213,  298,  305,  311,  330, 
379. 
State,  179,  180,  196,  245,  273. 
Missouri  Compromise,  180. 
river,  3.  11.  213. 
state.  180,  213,  245,  267. 
Mobile,  208,  230. 
Molasses,  39,  42,  43,  9S,  370.397. 
Money,  35;  145,  168,  356.^  / 

and  the  balance  of  tna'de.  .36. 
bank-note  issues,  218,  224,  345.. 
coinage,  222.  /      -.  '^ 

colonial  paper  money,  217-218. 
commodity  money  in  the  colo- 
nies, 92-93. 
contraction,  342. 
currency  act  of  1900  and  gold 

discoveries,  352-354. 
discovery  of  gold  in  California, 

222-223. 
financial  and  economic  effects, 

339-342. 
free  silver  agitation,  346-350. 
inflation  of  the  currency,  219, 

.353. 
issue     of    legal    tender    notes, 

338. 
national  banks,  338,  344-346. 
panic  of  1837,  221. 
panic  of  1893,  351. 
resumption  of  specie  payments, 

.339,  343. 
See  Banks.  Gold,  Silver,  United 
States  Notes. 
Monopoly.  225.  407,  408,  412. 
Montana,  7,  299,  300. 
Montreal,  .54. 
Morey,  Samuel,  111. 
Morgan,  J.  P.,  .334. 
Mormons,  ,300. 
Morse,  Samuel  F.  B..  213. 
Motives  for  exploration,  economic, 
28. 


INDEX 


515 


political,  26. 

religious,  28. 
Mowing  machine,  232,  239,  291. 
Mules,  183,  292,  293,  299. 
Mulhall,  M.  G.,  268,  283,  375. 
Musical  instruments,   158. 
Mustard,  143. 

Nails,  166. 

Napoleon,  106,  107,  109. 
National   Association   of   Manufac- 
turers, 444. 
National  banks,  see  Banks,  national. 
National  Greenback  Party,  343. 
National  Labor  Union,  426. 
Natural  Resources,  1-15,  356,  373, 
376. 

area  of  land,  2. 

coal,  5. 

coast  line,  3. 

fauna,  8. 

forest,  9. 

iron,  6. 

metals,  6. 

minerals,  7. 

rainfall,  13. 

soil,  9. 

temperature,  12. 

water  power,  3. 
Naval  stores,  31,  37,  39,  41,  45,  49. 

50,  51. 

Navigation   Acts,    38-44,    98,    102, 

106,  131. 
Nebraska,  295. 
Negroes,  83-86,  259,  273,  384,  430- 

432,  449,  450,  451. 
Nevada,  8,  283,  300,  348. 
New  Bedford,  Mass.,  381. 
Newl)old,  Charles,  124. 
New  England,  23,  28,  31,  43,  46,  49, 

51,  52,  53,  54,  56,  59,  62,  64, 
67,  71,  72,  74,  75,  76,  79,  80, 
84,  85,  88,  89,  93,  98,  99, 
102,  108,  120,  125,  144,  145, 
149,  153,  161,  162,  163,  187, 
212,  217,  224,  232,  235,  244, 
246,  269,  379,  382,  384,  388, 
420. 

Newfoundland,  6,  21,  24,  31,  52,  64. 

New  Hampshire,  50. 

New  Harmonv,  Ind.,  154. 

New  Jersey,  23,  73,  81,  85,  200,  379, 

388,  393,  402,  407,  414,  415, 

420. 


New  London,  Conn.,  334. 

New  Mexico,  20,  300. 

New  Orleans,  22,  173,  175,  177,  178, 

182,  187,  189,  192,  208,  209, 

246,  311,  331. 
Newport,  R.  I.,  54,  59,  89. 
Newspapers,  215,  314,  336. 
New  York  City,  54,  89,  91,  111,  121, 

123,  192,  208,  212,  213,  221, 

230,243,  311,427. 
colony,   7,   11,  23,  59,  62,  75, 

76,  81,  85,  98,  103,  191,  200. 
state,  108,  110,  112,  135,  151, 

161,  163,  166,  175,  187,  190, 

192,  200,  224,  234,  235,  277, 

282,  283,  329,  379,  382,  383, 

388,  393,  420,  437,  459. 
New  York  Central  railroad.  210,  309. 
Non-enumerated   commodities,    37, 

39,  41. 
Non-importation,  98,  99,  130. 
Non-intercourse,  107-109,  142. 
North,  49,   73,   79,    118,   122,   153, 

181,  186,  226,  251.  266,  269, 

279,  357. 
Atlantic  States.  294. 
Central  States,  267,  294. 
Northwest,  182,  183,  213,  247,  267, 

294,  305. 
passage,  29. 
North  Carolina,  11,  23,  49,  50,  115, 

116,  lis,  120,  161,  172,  179, 

189,  297,  380,  381. 
North  Dakota,  295. 
Northern  Pacific  railroad,  351. 
Northern  Securities  case,  324. 
Norway,  204,  422. 
Nova  Scotia,  24. 
Nuts,  71. 

Oats,  41,  64,  70.  71.  241,  294,  296. 
Ogden,  Utah,  307. 
Ohio  (state),  11,  125,  161,  163,  166, 
175,  189,  192,  209,  230,  231, 
233,  234,  241,  283,  328,  380, 
382,  390,  393,  394. 
canal,  193. 

river,  11,  22,  24,  54,  112,  171, 
172,  173,  177,  178,  180,  182, 
188.  189.  193,  210.  379. 
Oil.  98.  165,  383. 
linseed-,  405. 
refining,   379. 
Oklahoma,  295. 


516 


INDEX 


Oleomargarine,  385. 

Olives,  67. 

Olmsted,  Frederick  Law,  253,  255, 

259. 
Omaha,  Neb.,  299,  307. 
Onions,  64. 
Orders    in   Council,    English,    106, 

107,  109,  138. 
Orient,  284,  459. 
Ornsbee,  Elijah,  111. 
Oswego,  N.  Y.,  54. 
Ore,  318. 

Owen,  Robert,  154. 
Oxen,  72. 

Oxenham,  John,  23. 
Oysters,  8. 

canning,  380,  381. 

Pacific  Slope  Region,  12. 
Panama  canal,  330,  459. 

Isthmus  of,  222. 
Panic  of  1819,  219. 

of  1837,  166,  208,  221,  224,  230. 
oU857^  158.  167,  224. 
'        of  1873,  326,  343,  348,  358,  427, 

428. 
of  1884,  317. 
of  1893,  317,  351,448. 
Paper,   58,   59,   98,    136,    143,    152, 

165,  167,  172,  377,  379,  381, 

405,  456. 
trust,  407. 
Paraffin,  456. 
Paris,  239. 
ParHament,  British,  52,  57,  59,  81, 

93,  97,  98,  100,  102,  133,  134, 

217. 
Patents,    143,    146,    157-159,    270, 

368-369,  385. 
See  Manufactures. 
Paterson,  N.  J.,  145. 
Patroonships,  21,  75. 
Pauperism,  138,  160. 
Pawtucket,  R.  I.,  136. 
Peas,  41,  64. 
Pears,  71,  232. 

Peck's,  Neia  Guide  to  the  West,  174. 
Pensions,  396. 
Pennsylvania,  7,  11,  23,  76,  81,  83, 

85,   98,    110,   135,   151,   161, 

163,  166,  172,  187,  190,  192, 

196,  199,  200,  230,  282,  283, 

362,  379,  380,  383,  388,  390, 

393,  394,  420. 


Pennsylvania    railroad,    210,    309, 

427. 
Peonage,  275. 
Peto,  S.  Morton,  160,  366. 
Petroleum,  13,  283,  306,  358,  393, 

405,  455,  456. 
Phalanx,  225. 

Philadelphia,  89,  91,  123,  151,  187, 

188,  192,  200,  208,  311,  380. 

Philadelphia  and  Reading  railroad, 

351. 
Phihppines,  298,  457. 
Phonograph,  385. 
Phosphates,  7,  393. 
Photography,  369. 
Pig-iron,  see  Iron,  pig. 
Pilgrims,  23,  28. 
Pinekney,  C.  C,  173. 
Pitch,  35,  37,  39,  51,  56,  108,  115. 
Pitt,  William,  102. 
Pittsburg,  3,  188,  189,  192,  284. 
Planing  machine,  159. 
Plants,  of  Europe,  64,  67. 

of  America,  67. 
Plantations,  75,  180,  245,  273,  289. 

character  of,  260. 

system,  256-258,  272-275. 
Plate  glass  trust,  410. 
Plow,  64,  73,  124,  193,  232,  239,  241, 

291,297. 
Plums,  71,  232. 
Pljmiouth,  23,  38,  51,  52. 
Poland,  437. 

"Poor  whites,"  261,  273,  274,  384. 
Poppies,  125. 

Population,  23,  24,  31,  88-95,  157, 
159,  170,  172,  183,  208,  210, 
224-225,  231,  251,  201,  272, 
286,  305,  373,  420,  421,  434- 
436. 

composition  of,  434,  435. 

growth  of,  88,  434. 

industrial  distribution,  437. 

movement  of,  173-175. 
Pork,  41,  125,  177,  178,  299,  311. 

packing,  243,  277. 
Portages,  89. 
Portland,  Me.,  91. 
Porto  Rico.  19,  20,  298. 
Port  Royal,  21. 
Portsmouth,  O.,  193. 
Portugal,  17,  19,  27,  29,  31,  83,  84, 

101,  204. 
Post-office,  91,  92,  215,  314. 


INDEX 


517 


delivery  of  mail,  314,  335. 

mail  cars,  314. 

postal  money  orders,  314. 
Postmaster  general,  92.     See  Com- 
munication. 
Pot  and  pearl  ashes,  37,  39,  45,  51. 
Potato,  68,  241. 

digger,  291. 

famine  in  Ireland,  238. 

planter,  291. 
Potomac,  56,  111,  379. 
Potters'  wares,  136. 
Pottery,  138,  380,  381. 
Poultry,  278,  293,  298. 
Poverty,  138,  160,  467. 
Power  loom,  132,  146,  149,  163. 
Pre-emption,  247,  268. 
Prices,  145,  219,  222,  225,  353,  429, 
448. 

See  Aldrich  report. 
Primogeniture,  76. 
Printers'  union,  425. 
Printing,  17,  59,  165. 

press,  158,  159,  215. 

types,  143. 
Privateers.  101,  105,  107. 
Protection,  35,  103,  104,  135,  142, 
147,  150,  151,  152,  153,  167, 
369,  370,  396. 
Prothero,  George  W.,  72. 
Providence,  R.  I.,  86. 
Provisions,  37,  39,  40,  104,  165. 
Prussia,    101,    109,   204. 
Public  lands,  see  Lands,  public. 
Pumpkins,  65,  68,  69. 

Quebec,  21. 

Quincy  tramway,  199. 

Quit  rent,  21,  74,  76. 

Railroads,  151,  159,  167,  186,  193, 
223,  238,  241,  245,J69,  377, 
405,421.       . 

liuilding,  199,  212,  305. 

character  of  American  rail- 
road, 306. 

combination,  309,  324,  326. 

competition  with  water  routes, 
210. 

discrimination,   322,   326,   410. 

electric  interurban  railways, 
328. 

federal  regulation,  327. 

freight  traffic,  318. 


growth,  305,  317. 
importance,  197. 
passenger  service,  319. 
pooling,  309,  323. 
rates,  310,  321. 
state  regulation,  326. 
transcontinental,  306. 
See  Transportation. 
Railroad  conductors'  union,  425, 443. 
Rails,  165,  212. 

steel,  307,  362.  \ 

Rainfall,  13,  300. 
Rake,  123,  239. 
horse-,  241. 
Raleigh,  W.,  23,  69. 
Randolph,  John,  153. 
Rape,  125. 
Ratzel,  172. 
Read,  Nathan,  111. 
Reading  railroad,  210. 
Reaping    machine,    232,    238-241, 

266,  270. 
Reciprocity,  396-397. 
Refrigerator  car,  277,  298. 
Regions,    physical,    of    the    United 

States,  11. 
Renaissance,  17. 
Republican  party,  343. 
Revolution,  American,  74,  76,  89, 
91,  100,  101,  115,  118,  122, 
123,  130,  138,  142,  170,  172, 
173,  186,  217. 
industrial,  see  Industrial  revo- 
lution. 
Rhode  Island,  23.  28,  98,  121,  135, 

161. 
Ribbons,  360. 

Rice,  39,  41,  49,  63,  67,  70,  71,  72, 
100,  115,  118,  125,  246,  247, 
256,  276,  294,  449. 
Richard  II  (of  England),  35. 
Rivers,  3,  91,  197,  241,  376. 

commerce   on,    173,    178,    188, 
209,  311,  329,  330. 
Roads,  89,  91,  187-188,  195. 
colonial,  89-92. 
turnpikes,  187-188,  197. 
Rochester,  N.  Y.,  191. 
Rockefeller,  John  D.,  402. 
Rope,  178. 

Rotation  of  crops,  65,  66. 
Royal  African  Company,  84. 
Rubber  goods,  158,  161,  369,  385, 
405,  423. 


518 


INDEX 


Rum,  37,  39,  42,  59,  84. 
Rumsey,  James,  110,  135. 
Russia,  31,  137,  204,  272,  388,  437. 
Rye,  41,  64,  70,  71,294. 

Sacramento,  Cal.,  307. 
Safes,  380. 

Sailing  vessel,  51,  52,  205,  206,  313, 
333. 

See  Ship-building,  Shipping. 
Sainfoin,  67. 
St.  Lawrence  river,  54. 
St.  Louis,  Mo.,  189,  213,  331. 
St.    Mary's    Falls   canal,    11,    312, 

332. 
Salmon,  8,  302. 
Salt,  7,  31,  40,  59,  63,  172. 

trust,  407,  410. 
San  Francisco,  Cal.,  215. 
Savannah,  Ga.,  89,  92. 
Scandinavia,  348. 
Schools,  249,  376,  424. 
Schuylkill  canal,  210. 
Scotland,  40,  80. 
Scott,  Thomas  A.,  309. 
Screw  propeller,  206. 
Scythe,  124,  239. 
Seaman,  E.  C,  183. 
Seattle,  Ore.,  334. 
Seed-sower,  233. 

drills,  233,  240,  241,  291. 

See  Agricultural  implements. 
Selected  References,  16,  33,  48,  61, 
77,87,96,  114,  129,  141,156, 
169,  185,  201,  227,  237,  250, 
265,  285,  304,  315,  337,  355. 
371,  398,  418,  433,  452,  469. 
Servants,  78-82. 

indented,  80. 

''free-willers,"  80. 

treatment  of,  82. 

See  Labor. 
Servitude,  80,  83. 

involuntary,  80,  81, 

voluntary,  80. 

See  Labor. 
Seven  Years'  War,  22,  54,  97,  171. 
Sewing  machine,  158,  359,  363,  367, 
369,  456. 

McKay-,  365. 
Seybert,  Adam,  188. 
Shaler,  N.  S.,  3,  91. 
Sheeo,  72.  234.  243,  276,  299. 
Sheffield,  Lord,  37,  46. 


Sherman  currency  act  of  1890,  349. 

anti-trust  law,  323,  415. 
Ship-building,  35,  39,  49,  51-52,  62, 

106,  205,  313,  377,  405. 
Shipping,  35,  145. 

Ainerican    shipping    after    the 

War  of  1812,  203. 
blows  at  neutral  trade,  106. 
coasting  and  inland  trade,  207. 
commercial      legislation      and 

treaties,  204. 
continental  wars  and  neutral- 
ity, 104. 
embargo    and    non-intercourse 

acts,  107. 
expansion    of    American    ship- 
ping, 105. 
foreign  shipping,  313,  332. 
harvest  from  neutrality,  104. 
introduction  of  the  iron  steam- 
ship, 206. 
the  American  clipper,  204. 
tonnage  acts,  106. 
See    Commerce,    Sailing    vessel. 
Steam ])oat.  Trade. 
Sickle,  64,  239. 

Silk,  31,  36,  45,  59,  67,  133,  153. 
manufactures,  359,  386,  387. 
Silver,  7.  13,  19,  20,  34,  283,  338, 
348,  351,  353,393. 
Bland  Allison  act,  348. 
certificates,  348. 
coinage,  218,  221-224. 
demonetization  of,  346. 
dollar,  346,  348,  349. 
Sherman  act,  349. 
Sirius,  206. 
Slater,  Samuel,  136,  138,  144. 

mill,  148. 
Slaughtering,  243,  381. 

and    meat   packing,   277,    377, 
380,  383. 
Slavery,  95,  117-122,  179-181,  226, 
"251-264,  272,  275,  449. 
abolition  of,  119,  180,  181. 
advantages  of,  254. 
attitude   towards,   in   colonies, 

86. 
character   of   plantation   man- 
agement, 260. 
decline  of,  118. 
defects  of,  254. 

development     of     South     pre- 
vented by,  251,  262. 


INDEX 


519 


distribution  in  colonies,  85. 
economic  cost  of,  259. 
effect  of  cotton  culture  on,  117. 
effect  of  estal)lishment  of  slav- 
ery on  East,  183. 
effect  of  establishment  of  slav- 
ery on  West,  181. 
firmly    established    by    spread 

of  cotton  culture,  180. 
growth  of,  251. 

introduction  into  America,  84. 
moral  effects  of,  260. 
nature  of,  253. 
overseers,  260,  261. 
slavery    and    the    population, 

26l! 
See  Labor,  Servants. 
Slaves,  63,  80,  84,   118,    122,   138, 
180,  181,  251-264,  419. 
breeding,  121,  181,  253. 
import  duty  on,  60. 
markets,  261 . 
ownership  of,  261. 
price,  181. 
treatment  of,  260. 
Slave-trade,    83-86,    120-122,    181, 

253. 
Sleeping  cars,  307. 
Smith,  Adam,  38. 

Smith,  Captain  John,  23,  28,  52,  56. 
Smuggling,  46. 
Snuff,  143.  165. 
Soap,  55,  143,  165. 
Social  institutions,  93-94,  95. 
Socialism,  225. 
Soil,  fertility  of,  9. 
Sorghum,  67. 

South,  11,  46,  52,  63,  72,  80,  85, 
89,  94,  118,  119,  135,  138, 
153.  179,  180,  183,  189,  198, 
226,  246,  251-264,  267,  269, 
273,  276,  289,  294,  296,  357, 
381,  383,  385,  419,  430,  431, 
432,  437,  449. 
agriculture    in,    75,    122,    272- 

275. 
and   slavery%    251-264. 
capital  in,  260,  273. 
industrial  development  of,  383. 
labor  in,  431,  449. 
progress  prevented  by  slavery, 

251,  262. 
See      Cotton,      Manufactures, 
Slavery. 


South  America,    19,   34,    105,   204, 

397. 
South  Carolina,  7,   11,  23,  71,  85, 
100,  115,  116,  118,  120,  153, 
179,  261,  276,  382. 
South  Dakota,  295. 
South  Omaha,  Neb.,  380. 
Southwest,  178,  180,  181,  186,  189, 

209,  229,  231,  288,  307. 
Spade,  64,  73,  124. 
Spain,  17,  24,  27,  28,  29,  31,  36,  38, 
43,  55,  101. 
colonization,  19-20. 
exploration,  19. 
war  with,  334. 
Specie  circular,  221. 
Specie  payments,  suspended,  339. 

resumption  of,  343. 
Speculation,     160.    168,    196,    219, 
220,  224,  229,  230,  247,  403. 
Spelt,  67,  125. 

Spices,  31,  46,  146,  153,  370. 
Spindles,  162,  358,  359,  382. 
Spinning  and  weaving,  49,  55,  56, 
131-135,  144-147. 
jenny,  131,  134. 
Spurry,  125. 
Squash,  69. 
Stage,  91. 

Stamp  Act,  43,  98,  99. 
Standard  Oil  Company,   322,   402, 
40.5-407,  408,  410. 
South  Improvement  Company, 
406. 
Standardization  of  machinery,  367. 
Stanwood,  Edward,  101. 
Starch,  402,  405. 
Staves,  45,  49.  50.  63. 
Steam,  as  a  motive  power,  149,  151, 
164,  206,  368. 
engine,  132,  135. 
hammer,  159. 
Steamboat,  17.5-178.  229. 
invention  of.  109-112. 
iron.  206,  313,  332. 
traffic,  311. 
See  Ship-l)uilding. 
Steel,  157,  362,  369,^377,  379,  388, 
390. 
Bessemer,  362,  390. 
concentration  of  manufactures, 

391. 
open-hearth,  391. 
rails,  307,  390. 


520 


INDEX 


Steel,  trust,  407,  410,  411. 

See  Iron  manufactures. 
Stereotyping,  369. 
Stevens,  John,  111. 
Stevens,  Uriah  S.,  426. 
Stock  watering,  321. 
Stone,  306,  318. 
building,  7. 
Stoves,  158. 
Stove  Founders'  National  Defence 

Association,  444. 
Strawberry,  69,  232. 
Strikes,    351,    426-427,    442,    444, 
445-447. 
sympathetic,  447. 
Suez  canal,  313. 

Sugar,  39,  43,  49,  63,  98,  143,  152, 
179,  246,  247,  256,  276,  297, 
370,  397,  402,  405. 
beet,  298. 
bounty  on.  396. 
refined,  165,  166. 
refinery,  408. 
trust,  407,  410,  411. 
Sugar  act,  97. 

Suggestive    Topics  and    Questions, 

15,   32,   47,   60,   76,   86,   95, 

112,  128,  140,  155,  168,  184, 

200,  226,  235,  249,  264,  284, 

303,  315,  336,  354,  370,  397, 

416,  432,  451,  467. 

Summary,  94,  95, 139, 140,262,263. 

economic  integration,  466. 

material   progress   in   colonies, 

94,  462. 
material   progress,    1808-1860, 

263. 
rise  of  industriahsm,  465. 
sectional      divergence,      1808- 

1860,  262. 
social  development  in  colonies, 

95. 
struggle   for  commercial  inde- 
pendence,    1760-1808,     139, 
463. 
westward  movement,  464. 
Sumner,  William  G.,  160. 
Superior,  Lake,  6,  282,  331,  390. 
Supreme  Court,  323,  327. 
Surplus  revenue  of  1837,  194,  221. 
in  1872,  370. 
in  1881,  394. 
Swank,  M.  D.,  165. 
Sweating  system,  363. 


Sweden , 2 1 , 3 1 , 50 , 1 0 1 , 1 09 , 204 , 422 . 
Swine,  72,  234,  243,  247,  256,  276, 

299 
Switzerland,  204,  272. 
Syracuse,  N.  Y.,  191. 

Tanneries,  172. 
Tanning,  49,  381. 
Tar,  35,  37,  39,  51,  56,  108,  115. 
Tariff,  60,  103-104,  165,  203,  206, 
208,  238,  356,  358,  377,  411, 
459. 

attempts  to  reduce,  370. 

commission,  394. 

during  Civil  War,  369. 

of  1816-1824,  152. 

of  1824-1842,  153. 

of  1842-1846,  166. 

of  1846-1861,  167. 

of  1864,  369,  370. 

of  1883,  394. 

of  1890,  350,  395. 

of  1893,  350,  396. 

of  1897,  396. 

reciprocity,  396. 

reform,  370. 
Tarr,  R.  S.,  5,  6. 
Taxation,  97,  98,  103. 

income  tax,  396. 

internal  revenue,  369,  370. 

See    Duties,    Tariff,    Tonnage 
dues. 
Taylor,  John,  122. 
Tea,  46,  63,  98,  146,  370. 
Teaching,  423. 

Telegraph,  159,  213,  214,  314,  335, 
405. 

duplex,  314. 

wireless,  335,  385. 
Telephone,  314,  335,  385,  405. 

Bell  system,  335. 
Temperature,  12. 

Tennessee,   11,   120,   125,   179,  234. 
383,  390. 

river,  171. 
Texas,  20,  120,  181,  251,  257,  295, 

299,  383. 
Textile  manufactures,  56,  136,  137, 
144,  152,  1.53,  358,  359,  369, 
377,  386-388,  422. 

improvements  in,  360. 

machinery,  130-135,   145,   150, 
360. 

protection  to,  152,  153.  396. 


INDEX 


521 


Thames  river,  England,  52. 
Three-cornered  trade  with  Africa, 

42,  84. 
Threshing  machine,  238-241,  270. 
Timothvr68. 
Tin,  165. 

cans,  405. 
plate,  396. 

plate  tru-st,  410,  411. 
Tobacco,  11,  13,  37,  39,  40,  45,  49, 
53,  60,  62,  63,  69,  70,  71,  72, 
78,  100,  115,  118,   122,  125, 
136,  165,  246,  247,  256,  269, 
275,  293,  294,  297,  377,  381, 
405,  449. 
trust,  408. 
de  Tocqueville,  Alexis,  234. 
Tonnage   dues,   60,    102,    103,    106, 

136. 
Tools,  57,  64,   123,   136,   159,  255, 
456. 
edge,    138,    159,    165. 
Townshend  Acts,  98. 
Trade,  49,  89,  92. 

balance  of,  36,  457. 

colonial,  92,  93. 

domestic,    178-184,   208,   209- 

210,  459. 
efforts  towards  freedom  of,  101. 
foreign,  26,  101-109,  142,  196, 

203-208,  334,  454-459. 
river,  188-189. 

See  Carrying-trade,  Commerce, 
Shipping. 
Trade  unions,   225,   425-426,   442- 
444. 
incorporation  of,  447. 
methods  and  policies,  443. 
union  label,  444. 
Trans-Missouri  Freight  Association, 

323. 
Transportation,     89-92,      186-215, 
305-336,  357.  373. 
canals  and  river  routes,  329. 

in  Ohio,  192. 
early  canals,  189. 
electric    interurban     railroads, 

328. 
Erie  canal,  190-192. 
failure  of  State  enterprise,  196. 
federal  aid,  189. 
importance  of,  186,  197. 
internal  improvements  by  the 
States,  193. 


investment  of  borrowed  capi- 
tal, 194-196. 

lake  transportation,  331. 

ocean   merchant    marine,    313, 
332. 

railroad  building,  199,  212,  305. 

railroads,  30.5-328. 

river  trade,  188. 

stages  of  development,  186. 

transportation,  canals  and  river 
routes,  329. 

turnpike  period,  187. 

See       Commerce,       Railroads, 
Shipping. 
Traveling  salesman,  408,  411. 
Treaty  of  Paris,  2. 
Trolley,  see  Electric  interurban  rail- 
road. 
Trollope,  Mrs.,  232. 
Troy,  N.  Y.,  380. 
Trusts,  373,  402-416. 

and  labor,  411. 

anti-trust  law,  323,  415. 

movement,  402-405. 

prices,  410. 

profits,  410. 

promotion,  403. 

special  favors  to,  410. 

Standard  Oil,  402,  405. 

See  Industrial  Combinations. 
Turkey,  8,  272. 
Turnip,  64. 

Turnpikes,  186-188,  197. 
Turpentine,  39,  50,  51,  161. 
Type-setting,  423. 
Typewriter,  385,456. 

Umbrellas,  423. 

Union    Pacific    railroad,    307,    308, 

351. 
United  Mine  Workers,  412. 
United    States    Bank,    First,    218, 
219. 

Second,  219. 
United  States  notes,  338-343. 

contraction  of,  342. 

depreciation,  339. 

effect  on  cost  of  war,  340. 

effect  on  prices,  340. 

effect  on  wages,  342. 

financial  effects,  339. 

inflation,  343. 
United  States  Ship-building  Com- 
pany, 403,  414. 


522 


INDEX 


United   States    Steel    Corporation, 

392,  403,  404. 
Utah,  8,  300. 
Utica,  N.  Y.,  191. 

Van  Buren,  Martin,  154. 

Vandalia,  111.,   188. 

Vanderbilt,  Cornelius,  309. 

Vegetables,  67,  298,  301. 

Vetches,  64,  125. 

Villeinage,  78. 

Virginia,  27,  28,  38,  50,  56,  62,  70, 
72,  73,  74,  75,  81,  83,84,  85, 
86,88,91,  100,  101,  103,  110, 
115,  118,  119,  120,  172,  179, 
189,  192,  200,  253,  276,  297. 

Wages,  225,  342,  427-430,  445. 
minimum,  443. 
system,  431. 

Wagons,  58,  240. 

Wales,  80. 

Walker,  Francis  A.,  126,  435. 

Walker,  Robert  J.,  166,  208. 

Waltham,  Mass.,  145. 

War  of  1812,  125,  142,  170,  174, 
186,  203,  207. 

Warehousing  system,  167. 

Warner,  G.  Townsend,  19,  34. 

Washington,  Booker  T.,  449,  450. 

Washington,  D.  C,  144,  188,  213. 

Washington,  George,  189. 

Waste  products,  utilization  of,  379. 

Water  power,  3,  164,  381. 

Waterbury,  Conn.,  380. 

Wealth,  251,  256. 

concentration  of,  460-462. 

Weaving,  see  Spinning. 

Webster,  Daniel,  148. 

Weeden,  W.  B.,  64. 

Welland  canal,  11. 

Wells,  D.  A.,  46  n.,  270,  367. 

West,  135,  167,  170-185,  186,  188, 
189,  193,  195,  197,  198,  199, 
208,  209,  210,  223,  225,  232, 
238,  245,  247,  251,  267,  268, 
269,  276,  279,  289,  291,  299, 
326,  357,  373,  381,  419,  421, 
437. 

West  India  Company,  Dutch,  20,  54. 

West  Indies,  19,  20,  42,  43,  46,  50, 
59,  67,  84,  86,  89,  100,  102, 
104,  105,  181,  204,  272. 

West  Virginia.  394,  414,  415. 


Westward  movement,  170-185,  186. 
early  westward  migration,  171. 
introduction  of  steamljoat   on 

western  waters,  175. 
movement  of  population,  173- 

175. 
significance  of,  170. 
spread   of  cotton   culture  into 
Southwest  and  effects,  178- 
184. 
western  tr^de,  172,  178. 
Whale  fins,  39,  45. 

fishery,  53,  209,  381 . 
oil,  41,  45. 
Wheat,  11,  13,  41,  64,  70,  71,  102 
105,  122,  125,  196,  209,  212^ 
231,  241,  245,  246,  266-272, 
269,  270,  272,  294,  295,  321, 
351,  358. 
exports,  272. 
Whips,  380. 
Whiskey,  177,  402,  405. 

trust,  407,  410. 
Whitney,  EH,  116,  179,  366. 
Williams,  Roger,  28. 
Wilson,  W^oodrow,  1. 
Wine,   31,   40,  46,   60,   67,  97,   98, 

146,  3V0. 
Wire,  390,  407. 
trust,  410. 
Wisconsin,  161,  174,  213,  231,  241, 

326. 
Woad,  125. 
Women,  employment  of,  422-424, 

438. 
Wood,  455. 

manufactures  of,  143,  152,  167, 

455,  456. 
pulp,  369. 
Woodbury,  Levi,  120,  177,  205. 
Wool,  44,  59,  72,  150,  163,  167,  455. 
Woolen    manufacture,    36,    44,    56, 
133,  138,  142,  143,  146,  149- 
150,  153,  162,  163,  165,  167, 
359,  386,  388. 
price,  150. 

protection  to,  153,  167,  396. 
Wright,  C.  D.,  50. 
Wynne,  J.  H.,  72. 
Wyoming,  299,  300. 

Yarn,  44,  131. 

Zinc,  7,  393. 


OF  THE 


yC  89758 


